what do you think the strengths and weaknesses are of the military investigative service when it comes to these types of offenses? >> i think turnover is a prime challenge. is that where the constant influx of new investigators, and keeping a highly trained court is a challenging and the reason i say that is that we get a very, very good training. aske..

we didn't have access to the kind of data that we have now. >> i was kind of surprised because in one of the slides, you stated that victims of sexual assault were many times more likely to develop ptsd into these types of problems if they reported sexual assault; is that correct? >> i must have misunderstood that. >> we did have a slide that said military sexual trauma and people under intense combat is that correct? >> that data that is out there in the civilian research and the va found as well. >> what happens when job

performance falls as a result of having ptsd or depression or these types of maladies? >> it's difficult for folks to maintain high levels of performance that they need to when they are trying to overcome these problems in their daily lives and relationships at work. >> how are the service people treated with that? >> i think that -- i don't know if i can paint with a broad a brush but my experience providing treatment and care one of the things i do when a commander used to contact me as a psychologist having problems with one of my troops i would try and educate them on some of the information and how a person who's suffering from ptsd might comport themselves in the challenges they would have specifically. by providing that information to the commanders that were ahead of the person in the unit, they

were able to understand and maybe take a different factor towards helping the person. >> thank you. >> to have the senior flag officers testify of course and also waiting throughout the morning panel used to have a practice at the commission that the government witnesses would be on the first panel and they object to that inappropriate cases but the reason i'm pointing it out -- i will mention one other thing. the past few times we've invited someone from the department of justice the federal law mandates all federal agencies shall cooperate fully with the commission. they won't send to testify at any time in the past couple of

years. so it kind of the allies at least one false myth and that is that the military doesn't take this issue very seriously. so after trying to compliment you, i did want to -- i think to the vice admiral to get up to speed on some of the issues some of the biggest improvements for the kind of career tracking that i think you'll have the lead on in the media and those of us that are -- i was a very brief litigator but prosecutors and other litigators you learn to be a great lawyer by watching the great council, criminal defense working side by side, then

having them available to counsel you and for the c-span viewers who may not know why if you could elaborate and explain, as i've been able to understand it there were incentives for those that entered the job corps to be assigned prosecutors but they were to be stationed elsewhere and wasn't quite the rewards of a track that ended with flat officer for the senior judge and now you created that and it seems to me that both victim and the accused with falsely or rightly we want to have a system that convict someone on a fair manner that seems to me to be maybe the most important performance of the past few years, and my vision of what it

takes to learn at a great larger side and you are a great lawyer and we may have been on the opposite side of an important case at one point, but cal -- what is the early result, and the other, how much do you think that will tell, can help, and what kind of patients do we need before we can see the effect of that solution? stat i appreciate your question and frankly you have done as good or a better job of describing the military litigation career path and track them those of our familiar with it. we institute it because we felt that we wanted to incentivize people to stay in the military justice and in particular incentivize people to take judicial positions. you describe the phenomenon, and wasn't that military justice

lost its value repeated assignments to be as competitive as officers who went and served with the operational flying community taking jobs on their face and in practice requires a greater degree of personal sacrifice with the operational forces day in and day out and you are not working as hard. i disagree with that fundamentally as a premise and determine the best way to keep good litigators in the courtroom is to break them into what line officers would call the equivalent of restricted community. they compete among each other for promotion so they are not competing against people who work for the officers say the combat and command. they are competing against the litigators, trial defense and officials. i will tell you that it takes

persistent leadership and attention to identify and groom the right people. just like we've said with everybody else, numbers are in everything. so the intangible factors who have what it takes to be a good litigator. you look for those people, you groome them and for a for your point an opportunity to apply to specialize. the military justice practitioners and the core leaders. at that point we tend to structure the organization as we bring a country of these people so that they will be in the department head for the trial counsel and the defense counsel. they are trained only in litigating that mentoring of the council and bringing them along because as you said, it's not just by doing and it's watching and learning and its case by

case dictum by victim an argument by argument. we are committed to continuing to do that and starting to bear fruit as we've seen the promotion prospects improved the career practitioners are promoting a rate equivalent than the rest of us. that's critically important because there is no substitute for seniority, longevity and experience when it comes to prosecuting complex cases. the chief judge position to meet the particular as you said not only incentivizes it but incentivizes people to be judges and to take more than one tour as a judge. that is critically important. you say how long will it take to bear fruit i think it is already our junior personnel are anxious to be part of that community. you can't stand the courtroom your entire career.

you have to move among the fleet to appreciate how to conduct resonates in the fleet and to appreciate the perspective of the sailor and the community to read some of our best military justice practitioners today are seen as lawyers. >> commissioner? >> thank you, mr. chairman. excuse me. general patent, i have three questions of you, but the others that have given such excellent presentation should feel free to china and if you have anything to add. general, the testimony that we just heard i think is a very, very exciting to see the level of commitment by the various leaders of the various services.

the newest experiments are about to take place, which we imagined will bear fruit. money is being spent, creativity is being expended, chances are being taken, people are focusing enormous energy and attention on what you admitted in your own testimony is a terrible problem. i'm wondering how these experiments will be evaluated, with the learning will be shared, how the public will be informed of whether or not all these excellent input actually yield results and how soon, so i'm wondering what the plan is for disseminating the best

practices if any of these things turn out to be if not the magic bullet, then a part of the arsenal that becomes the way that we combat sexual violence in the military, pardon the mother terrie delusion. >> thank you for the question. one of the lines of inference is one that you're commenting on and focusing on, the linus effort of assessment. so there are some things in place here that allow us to -- we recognize we have to continue to look at ourselves. and one that i've actually been sharing with my colleagues in the services and so forth is that we have to assess our programs with an eye towards taking the best practices and making them the common

practices. so that is the approach that we are taking in a number of different areas as we apply the assessment line of effort to everything else we do. one example this training. we have launched a very comprehensive assessment in the area of training this will go on for several years. the first element of training that we assess coming and we just completed the assessment and i'm going to get to the results but we just completed the assessment on all the training the commanders get before they take command as well as training and the senior noncommissioned officers get before the tip of senior leadership positions. the regimen is because the centerpiece and a key role that they have and any of the sexual assault prevention programs. is this assessment went on for over several months. we've just collaborative lee reviewed the results of that assessment with all the services

and the secretary of defense will publish the results of this assessment in the end of the days and weeks ahead and it's taken the area of training as all the servicers were doing something but that we saw best practices and some services that we want to be the kind of practices interactive training, adult learning. the training tailored to the specific audience. if there is a dramatic presentation of sexual relationships that resonates very strongly with young adults called a sex signals, this is perfect for initial military training and people that play that well with the senior commander staff, so that person is adapted to that audience. we've also seen where powerpoint training is we've thrown away. commanders and senior

commissioners thrive on training scenario based training, ethical decision is one model that the marine corps used. the call but take the helm train. it was given by a team of experts and some mobile training team they take that to every ship and element within the navy to export that training and was driven by a number of scenarios are you going to do as the captain of the ship when this happens on your ship and then talking through the serious issues and so forth associated with that. so we have some really aggressive assessment programs in place for the training site. shifting gears a little bit to answer the question how do we then codify that? we standardize it in policy, and so the corps learning objectives that we've identified that work best and best practices carper all the services will be

codified in a policy the secretary of defense is promulgating across the department fox will be the standard score learning objectives and competencies' for all pre-commander training. >> you will be measuring and evaluating each and every one of the initiatives these leaders have delineated and you are going to be making an assessment of which are more successful than which and putting those four were in uniform standards of some kind? >> no, no, that's the idea. i expand on the training peace and the other program as well. general harding mention that the special victims council that is a pilot program the air force is taken and we want to take a very close look at across the department taking the lessons learned and somewhere down the road to see how that can apply to the rest of the department. the special victims capability

is another area. we convene a study group and look at all the things the services are doing for wheat and codify that i policy and standardized over time the way in which we do special victims capabilities to the hispanic when professor sold and urged us not to recommend more changes because we haven't even figured out whether the changes are currently underway are going to take hold and the congress invariably will make a mistake and say if they tried to do too much too soon all of that we take very seriously it seems to me a very few good way wording

off future modeling in your business would be to make a very rigorous assessment that is being done and having it see the light of day so that the public has confidence that you are going to assess what are the best practices and make those the common practice as you've just identified. i think it would go a long way. my second question before i lose the patience of the chair if. my second question is has the secretary given any thought to assessing cases that perhaps were mishandled in the past and if you have seen any of the public comment that we have

received on this topic like mine laypersons estimate is the cases that might have been mishandled in the past it have you given any thought to the past injustices some opportunity for women and men who might not have then treated as well by their services as we hope dictums and perpetrators for that matter will be treated going forward on the basis of all these new programs how we might compensate

them if for the past failure to address this as a serious issue. >> the best way to answer that is by referencing an ongoing review to read the department of defense inspector general is conducting. i don't have oversight of that particular agency. however they keep me informed on their reviews and efforts and they are finishing up a 2012 review cases that are handled by the military investigative offices across the department. they look specifically at closed cases. how did they -- to comply with the standards of an investigation, the with of the pharaoh and the timeliness and those sorts of things. i don't have the date on this because i haven't seen the final report they are looking at now

and they have returned some cases back to the service military congressional investigative offices to do with the ncis for the purpose of continuing the investigation. i know they are doing some analysis to whether those particular work in the standards of accuracy, timeliness and so forth by the investigative offices, so that is one element. and i would say that the secretary of defense always has his inspector general to do things like that. in this case, to the criminal investigative matters. they've all the announced that their next year, the current year, 2013 oversight review topic will be compliance across the department of a sex offender registry program and the detail a number of things that they are going to be looking at. so there is two years in a row where the violent crimes

division, the department of defense has focused on these matters for the purpose of giving this a i think a very critical look at the direction of the secretary. >> but there is no specific opportunity, for example, of women or men who think that they were treated unjustly in the past to seek some kind of -- >> one thing that was addressed by the provision in the national defense authorization act that we just signed into law in 2013 is the direction to reinforce the fact the board of correction and military records that exists in each of the department's mr. emphasize that and inform our both active and retired populations that they are aware of that as a form of redress for the wrongdoing or that sort of

thing and that is reinforcing that and my job will be with the services to really put into place and do that brought information campaign. >> will that extend to according people with the benefits if they were qualified or is it correcting the nature of their discharge? >> i believe generally it deals with the correcting of the active military component of the service. >> i will defer my third question until later. statin going to ask a question and then we will go to the commissioner and have the last question. there was a reference i think by you, and i heard it and of your earlier panel's to the issue of child sexual abuse. to what extent are military families being victimized by

creditors or read this to happen to be service members outside of the family's? is that an issue going on because we haven't talked about if we focus on service member to service member, but since child abuse has come up twice during this hearing i'm to find out more about what that is. >> part of the reason you see a family together is because you are trying to get expertise within our own organizations in the cases that are the most difficult for us to adjudicate and litigate and child sexual assaults and adult sexual assaults are both like that. they have some similarities and some differences. we are working hard to have our litigators' understand the behavior that is exhibited by victims. you see some of those things happening in the family's that

as you know isn't true today as we are working to ensure that we have the skills and that we develop the skills to deal with both kinds of cases because there are similarities and the critical differences, too. matter of fact, as you eluted to look specifically to find folks with that kind of experience and one of them is in the room today. and in our headquarters. and one of the most valuable things is to ensure that we are looking for the cutting edge training so that we don't just fall this to one side or the other the investigators and the future. i believe we will learn a lot from each other and we need to continue to do that with to devotees that would include child abuse.

>> commissioner, you have the floor. >> i have one question that i wanted to follow-up and the commissioner was talking about the point that she made there are people that were basically discharged and the circumstances because of how they reacted to the claims and we have worked with our veterans on the current military record operating the discharges in the past. i know how seemingly difficult it is to do it from their perspective and it's very uphill, so i would urge that

whatever the secretary-general was doing that it's a way to work on reviewing records of people who go in on the discharge and those have enormous consequences for health care, veterans' benefits, the job forum and maybe for those people where the system fails them because people like yourself are being charged with the proper procedures we can't forget about those who pay the heavy price early on and are still paying it now. the question i have the was listening to all the different branches we thank you for your

service to the country but whether we respond to one of the proposals in the earlier panel which is it's great that you are all doing these efforts to combat sexual violence, sexual assault, sexual discrimination but the fact that each of you is doing it in your own silo have a proposal that would create an independent unified branch for the cross branch vision because we would be independent civil servants, career path rather than the military path for the

service wide specialty of sexual assaults in the military. >> to take it from the commanders perspective if the notion is sexual assault cases would be removed in the chain of command and then provided to this independent agency, i would like to make a comment on that aspect of that and that is that we put a lot of responsibility on our commanders. they are responsible for the health and welfare and the accomplishment of the mission. of the readiness of their unit and we also owe them the tools to do the job. one is training and another is to develop the system that allows them to not only put standards in place but then to

enforce the standards by then applying measures to people who would choose to not comply with the standard of conduct and behavior so it's important in my view to retain the commanders as a central role in the justice system and the secretary defense recognizes this early this year when he decided to elevate the disposition authority for the commander, and previously that disposition position is to what direction the case would take in a sexual assault case the court martial, administrative separation or so forth that decision is moved from the 05 rank to the 06 ranked which the navy's and captain and airforce ranger, and i served in command

at both of those levels and i can tell you that as and 06 commander about 25 years in the army versus 20 at a very low level handled a significant number more cases in putting the courts martial and much more experience serving and working and that the 06 level that is in the army the first level you have an assigned trial counsel at your side so again, mindful of those elements the secretary decided to elevate a critical disposition to the 06 level but to retain that command disposition of 40 within the chain, and i will close by saying, with my commander hanft commanders are going to have to fix this problem and we need to keep commanders involved in the

process, not less involved removing any kind of decision making with regards to discipline and the chain of command we are not keeping commanders involved in the problem. the energy in the programs and all the things we talked about here in the statements and some of the initial questions anticipates when you remove some of those key elements from the chain of command and i would defer to any of my other colleagues for comments. >> thank you, commissioner for that question. any time you consider taking that valuable function they perform today holding the members accountable and making those judgments when you take that away from a commander of the second, third, fourth order effects are ugly and you ought to consider those affects before

making such a recommendation. first i would like to address the idea of taking the investigative responsibility. it's important that you understand the nature of the unit that you are investigating. the people involved, what they do, how they were trained, growing up in those services wearing that uniform, walking the walk and talking the talk is awfully important to understand how things might have occurred in a particular year net to find one size fits all would be awfully difficult to create in levels of expertise. as far as pulling from the commander to hold the members accountable and make those decisions we fight and win the nation's war and have a good track record of doing that. it's not by accident it's because we bring things to every fight with the best equipment, the best people, the best training.

those are three flags on the fourth leggitt table, the fourth is discipline and that the devotee to hold members accountable is important for the command and control. this is the art of military science now so we start to pull at that thread. second, third, fourth quarter of an important to all the fuss. so i think it's important to the nation to consider ramifications of looking to someone else to make those. >> thank you. >> i would like to address one piece in the remarks that you refer to as an independent silo and i can see how it might appear that way. we are different services structured differently. reservists cultures are different. but believe you me, my peers on the panel work well and cooperatively together we

leverage each other's experience and the judges train together. we take the best practices in our services and try to figure out how best to apply them within the challenges that we face differently so it may not appear that we are acting in a coordinated way but i can assure you that we are particularly when it comes to the challenges of the complex litigation and the prevention and response efforts. there are also in the essential very much the same with their emphasis on prevention. once they get to us, we'll the soldiers, sailors, airmen and marines a good efficient, effective and fair military justice system even though that is one of my primary statutory duties, i would like it if they didn't get to us in the

prevention efforts. islamic commissioner, you got the last question. >> i would just like to tell the general that i have a friend in the military and apparently that was extended sexual assault training program now and the intended it and thought it was wonderful just to let you know that. >> i've asked this question earlier before. is there any way to have guidelines for commanders especially with command and control is so important as to how to select a form for discipline for the courts martial or something like that and some sentencing guidelines for these types of offenses or

is the same year in possible. >> we have guidelines already. each of our commission officers and commanders is trained at each level to get additional on their responsibilities. as we have discussed already at the battalion commander and the brigade commander levels one and the army has an assigned judge advocate to help the system and making the disposition of decisions. so, you are going to find both by policy and our regulations where we have withheld all sexual assault related conduct to the battalion commander lovell initially and for the sexual assault brigade commander lovell there is some disposition guidance at the constitutional

level and the staff level the kernels with 20 years' experience who were guiding commanders in the execution under this system. so from that standpoint there is disposition guidance. >> the microphone isn't picking you up. >> in terms of sentencing guidelines, we think it's appropriate to consider those factors that underlined any sentencing system, any mature sentencing system and we execute that appropriately with panels and juries and a military judges who serve as prosecutors. estimate there is no need to write some of this down? >> if you are engaged in a criminal offense he will receive the appropriate disposition and the sentence that is unique to

the factors and mitigating your particular crime. >> now do you see more supervision over the line commanders as to what is brought up on the charges and the discipline for those commanders that don't bring things does that mean developed supervision from the field level? >> it's fair to say that in fact a great deal of interest in all levels of command and how they are handling these kind of issues, for example, you've got to the disposition elevation initially to the captain or colonel levels supported by the judge not to get indicted by the judge advocate in that decision, but you also got other oversight mechanisms. we have the court of appeals for the armed forces as the ultimate supervisor, we have article 37 which talks about unlawful

command incidences' in the country with the system, so there is in fact a level of interest and influence in those decisions. and if the commander is going to the to unhappy about how they would propose to handle the certain issue, that commander can pull up to his or her level to dispose of that allegation. >> thank you. >> i think my last question -- >> that's number four but i will let you go. >> my last question. when the service person final say restrictive for unrestricted claim do these documents at their personal and other words my concern is i have lots of concerns about my one concern is that it follows them from assignment to assignment and the second thing is if you file an unrestricted claim and decided to make a career of the service

a lot of other people go from unit to unit and i guess it is a navy term that follows them and how is all of that handled? to protect people because if you don't do that, don't you discourage those types of claims? >> unrestricted report, first of all the report itself is documented on form 2910 and the only person that gets a copy of that form in a sexual response coordinator that you spoke to and the victim and it doesn't go into a personnel file or follow someone throughout their career whether you report an unrestricted free port or get a restrictive report, either one. we keep a copy of the form 29 and in the unrestricted cases and in our defense sexual assault incident database. spearman is there any kind of discipline for people who perpetuate -- ayman i guess it's

a very difficult, but if i am in a unit and i go to another unit and there is someone there that i follow in a restrictive claim and it gets around, i could i guess get ostracized. >> what happens on any account is taken very seriously and the individual reports that the derby and harassed by someone within the unit for something that occurred previously the need to bring it to the attention of their commander or to the law enforcement depending on the level of harassment. >> and that is well communicated to the troops? >> i believe so. we tell everyone with the command in your experience, that kind of we want to know about. >> recognizing the need for protections and privacy and confidentiality and dictum preferences, one of the policies we have put in place just in the last six months is the expedited

transfer policy. it's a policy that costs the secretary defense promulgated that allows a victim to make a request for a transfer from the unit or from the installation and again it's at the request of the victim and some victims that's very important to them and other victims it may not be and they want to stay within that team and it only applies to the unrestricted reports. when you track those very closely to data there's been only about 200 of those requests made. i might add also if that request is made to the commander and a chain of command and if the victim isn't satisfied with the decision by the commander and they have the right to appeal to the first general officer to date in the over 200 requests for the transfer that shows that

only one of those transfers have been improved and in that one case the victim is separated from the service and the transfer wasn't necessary. we are watching them very closely to its one of the elements that we put into the database because, again, getting back to the question on the assessment, we are looking at ourselves to assess whether these programs are effective. are we providing the support to the victims that is intended by the policy. so it is a policy that we are looking at her closely. >> thank you to read in the interest of the bipartisanship, i am granting the commissioner the opportunity to ask a question. >> thank you. >> commissioners on your right and my left, i yield and i just want to return to the questions on the first panel and maybe the other side which is i certainly

concur with what one of the witnesses said that it's their mission to get more convictions like all of you will get more convictions in some context maybe you should do better as i and the sand from the civilian prosecutors, if two people have been drinking at a bar and leave together then there's an elevation of rape, there's prosecutors will obviously evaluate the evidence that it means something a little bit more than the she said she said before they think that they are willing to make the decision and

seek first beyond a reasonable doubt. one of the witnesses i'm not sure we are not afraid to bring cases the will result in the acquittals. they're certainly makes sense but representing the different services, do you think that there ought to be a different standard charging standard and maybe -- should the services may be charged for a lot of unique reasons try to bring a case and try to prove guilt at a level that would be slightly less evident, and the civilian context or do you think that the idea is to make about the same

charging decisions as a good civilian prosecutor would? >> i would offer an important part. weech try a lot of cases and that occurs off base, for example. the sicilian prosecutor is often the first one to make a decision whether or not to prefer charges. as a matter of course, the air force routinely request slavers of jurisdiction and we receive whatever is in the jurisdiction. we tried many cases, testimony all cases with one piece of testimony. i think we have the right standard in making the determination to beat we ask the commanders to take an oath before they prefer a charge that

simply asks them based on their personal knowledge or personal investigation of the case, do they honestly believe that the charges are true to the best of their knowledge and belief? that is the charging decision. and when those charges will forward to the trial at a later date, then we prove beyond a reasonable doubt the very same standard that we use everywhere else in the nation and it is reasonable that we will see the acquittals and we do. when you say the best example our model of how those decisions are made downtown where every bit is as good in that model that we will let other people decide, but it sounds to me -- and i would like the others -- what you are suggesting is you

will charge more cases even if it is proven beyond a reasonable doubt you might charge more cases that a really good civilian prosecutor would. is that a fair assessment and is that the current goal maybe you will teach the civilian prosecutors something. can you all help me with your thoughts? >> a couple of comments. i think that from our perspective we care about cases on both sides. is responsible. we also don't have prosecutors running for the reelection. they are defined by their duties. i think one of the challenges is when you look at a unanimous verdict in the town beyond a reasonable doubt in a 12 member jury panel in our world if you

have eight votes for the two-thirds majority can get a conviction beyond a reasonable doubt. a lot of people think that when you have the voting that is the hardest thing to get around and you have beyond a reasonable doubt standard and it helps to define why some people may not understand the sentence that comes out of the members panel because when four people had reasonable doubt and voted to a krepp they are still a part of that group helping to define the sentence so there are a lot of factors in the system and there's also the appellate courts in the system that have brought fact finding reviews. it's what professor sullivan is talking about it puts ripples across the system and it truly is a justice system and when we calculate these things and we think about the rights of the accused, the rights of the

victims, the institutional needs for good order and discipline so that we can be a fighting organization we have to look at it in its entirety and consider it carefully because the justice system is something the sanctity of the system is uncommon in some imperative for all of us. we do try our cases of the given evidence level of the counterparts we can show you that case. >> if you can supply that to the commission. >> the reality is in part america's moms and dads send us their sons and daughters and told us to a higher standard and we believe strongly they have a right to a victim free and a direct free from sexual assault and all the details that's part of our unique fabric. it's part of our specialized society apart from america where

we have that commitment to the discipline that requires us to make certain decisions that he would say in a resource constrained environment you wouldn't make. >> if i may need to the secretary of the needy or the chief of naval operations is to get more convictions. my mission is to ensure a fair, effective and efficient military justice system and has said, the officers are responsible for the safety, the welfare and the discipline within their command the of difficult leadership decisions to make and they make those decisions case by case, day in and day out and they try to do what's right in each case, not what's easy and what's expedient and not what is a perception of what is expected

of that. >> i want to thank you all of the panelists. this concludes the briefing. it's been extremely informative to all of us, and we appreciate not only your service but your participation today. we know that there are veterans out in the back of the audience and we also want to acknowledge their service and commitment and involvement in today's process as members of the audience. i also want to personally thank the commission staff that put this together and highlight who did a spectacular job of putting together the panels in this event today. thank you. i also want to acknowledge the panel and her staff responsible for all of the logistics of putting this together today who contributed to this spectacular event. lastly want to remind everyone that there is an opportunity to submit comments for the record you can submit comments to us and one of two ways either by mail at the u.s. commission on

civil rights office of the general counsel here at 1331 pennsylvania avenue nw washington, d.c. 20425. or you can send an e-mail, public comments at usccr.gov. we look forward to preparing the report. you have a motion that he wanted to make. >> [inaudible] not for the public understand the topic. we have 45 days from today to submit your public comments and then we look forward to

preparing and sending our report with finding the recommendation about what we've learned here today. thank you. it's now 2:45 come and we adjourn this hearing.

she had been talking about this dream that he had. she talked about it for years, the american dream come and then it had become his dream and he'd been in the trade just a few months before, and he talked about if i have a dream that america will someday realize these principles in the declaration of independence. so, i think that he was just inspired by the moment. >> the greatest honor history

can bestow is the title of peacemaker. this honor now beckons america and helps lead the world at last out of the valley of turmoil and on to that high a round of peace that man has dreamed of since the dawn of civilization. >> for making the benefits of our scientific advances and industrial process these available for the improvements for the new deleterious [knocking] why did you write a book about your experience?

>> it was an important period of history. i felt the fdic perspective should be brought to bear. there had been other accounts of the crisis that i felt were not completely accurate. especially in terms of what we did and what i did and i thought it was important for the historical record to present the perspective. and also, i think that currently for people to understand the different policy choices and different policy options i felt the public itself needed to engage more on financial reform, take a bigger interest and educate themselves, make it an issue. it's hard to make the book accessible and i have some policy recommendations that i hope people will look at and take seriously.

we are live this afternoon at the national press club here in washington d.c. for an examination of changes to u.s. immigration law. was to divide the national forum among the speakers to the u.s. chamber of commerce president thomas donahue, citigroup fais chair carlos gutierez and attorney general for indiana gregory zeller. ..

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[inaudible conversations] >> again, we are live at the national press club here in the nation's capital waiting for the start of this discussion on ways to reform u.s. immigration laws. it is hosted by the national immigration forum. we expect to hear from u.s. chamber of commerce president thomas donohue, citi groom president -- citigroup president carlos gutierrez, and it appears some of the speakers are arriving here. very quickly, on c-span in just

a couple of minutes vice president biden will be speaking at the u.s. conference of mayors' annual winter meeting. they're running a little bit late, but you can see that on our companion network, c-span. this evening at 6:30, live coverage of the poverty in america forum. former house speaker newt gingrich will be there along with ohio representative marsha fudge. again, that'll be live on c-span tonight starting at 6:30 eastern. [inaudible conversations] >> good afternoon. my name is ali neuroranny, i'm

the executive director of the national immigration forum, and i want to thank everybody or for joining us on this press conference on the prospects and the growing momentum for immigration reform in the 113th congress. there are many important issues for the 113th congress to address, but there are few issues that have a past, a present and a future of bipartisan support like immigration reform. today's event is another indicator of the new consensus on immigrants in america that has emerged. to forge this new consensus, conservative leaders who hold the bible, wear a badge or own a business have worked over the last two years and gathered in the mountain west, the midwest and the southeast to have rational conversations on how to make our nation -- or or how to move our nation forward on immigration. now these leaders from the faith, law enforcement and business community across the country are activating this consensus. today we are joined by the

highest echelons of america's business, law enforcement and faith leadership to call upon congress to work together to pass broad immigration reform that, number one, deals with aspiring citizens by creating a road to lawful status and eventually citizenship for them while respecting those that have been in line and awaiting naturalization or for many years. number two, modernizes our nation laws so that future immigrants, future immigration of workers and families is legal, fair and orderly, establishing worker programs that serve the needs of our work force and our economy. and finally, reform that recognizes the need for safety and security on our boarder and in our communities. with democrats and republicans recognizing the moral, economic and political imperative to create a 21st century immigration process, the 113th congress marks the best opportunity for broad immigration reform in nearly a

decade. but for legislation to pass, it will take leadership. leadership from the administration, from congress and from faith, law enforcement or and business leaders at all levels. in each case the leadership that is needed must be strategic, disciplined and unified. our speakers today are exactly that; streej i disciplined and unified. our unity of purpose comes from the common crisis facing families and businesses in our midst and cuts across professional sectors, geographic regions, political stripes and religious beliefs. our consensus lies in a common belief that all americans prosper when we welcome immigrants and empower them to participate fully in our society. we have a broad, a range of speakers today from these three constituencies, and i want to start with tom donohue who's president and ceo of the u.s. chamber of commerce, the world's largest business organization representing the interests of more than three million

businesseses of all sizes, sectors and regions. and for years he has been an incredible ally, partner and champion if our push to fix -- in our push to fix the nation's immigration system. >> thank you very much. good afternoon, ladies and gentlemen. i'm honored to be here. i'm pleased to be joined today by my friends and partners in the business, law enforcement and religious communities to talk about immigration reform. immigration reform isn't just a program to be implemented or a problem to be solved, it's an opportunity to be seized. it's an opportunity to fundamentally improve our global competition, attract and retain the world's best talent and hardest workers, secure our borders and keep faith with america's legacy as an open and

welcoming society. people are entitled to their own opinions on this issue, and as we all know, there are many of them. but they're not entitled to their own facts, and the facts are crystal clear. our current system is broken. everybody knows it, everybody recognizes it. finish it is not serve -- it is not serving the interests of our economy, our businesses or our society. america cannot compete and win without the world -- without the world's bestial rent. for example, it makes absolutely no sense to educate students in our universities and then send them home to apply that knowledge and skills to their economy and not to ours. we cannot sustain -- [inaudible] the elderly and needy without more workers, both low-skilled

and high-skilled, to grow our economy and to provide a larger tax base. common sense immigration reform is an important way to address tour changing demographics -- our changing demographics as an aging society. look at me, you'll understand that. we can't harvest our food, care for our sick or sustain our military without immigrants and temporary workers. our current work visa laws contain arbitrary caps that have absolutely no connection to what's happening in the real world. there are very serious limits in scope and difficulty in implementation in these current rules. surely we can do better. in fact, we have to do better if we're going to have the workers we need. what we need is this: a lawful, rational and workable immigration system that secures our borders, provides the

workers we need at all skill levels and protects the rights of citizens both undocumented and those legally pursuing citizenship. we believe immigration reform should include the following interrelated components: we must secure our borders and enable people and commerce to flow efficiently and lawfully in and out of our country. we've made significant progress on this front in recent years, and we can build on it by smartly deploying our technology, personnel and programs along the border. i must say parenthetically, a lot of the people that come to this nation don't necessarily come through the border. 40, 50% of them just stay longer than they intended to. we need to thoughtfully design

temporary worker programs that would allow employees to use with immigrant labor when the u.s. workers are not available. more to say about that in the q&a. outdated and overly-restricted visa policies are depriving america of both the high and low-skilled workers that we need. we need a visa system tied to market demands, and it must go beyond high-skilled, seasonal and agricultural workers. and include other areas where employers face demonstrated labor shortages. home health care aides and nursing home workers are prime examples. the caps should go up when the economy is strong and be adjusted down when the economy is not. as i mentioned, we need to expand the number of green cards for foreign nationals who graduate from our colleges and universities with advanced degrees. even with high unemployment we

have millions of job openings that go unfilled. either the workers come here to fill those jobs, or let me tell you, ladies and gentlemen, those jobs go somewhere else. and when they do, other jobs go with them. we also need a workable, reliable national employee verification program. now, the e-verify program has been dramatically improved. we are ready to move forward with it nationally provided there is strong preemption language for state and local laws, no obligation to reverify the whole team -- i know companies with 35, 50,000 employees. we certainly don't have to do that. and we need safe harbor for good faith efforts by employers. finally, we need to provide a path out of the shadows for 11 million undocumented immigrants who live in the united states

today. with the understanding they will meet strict conditions and pay a civil penalty and taxes going forward and some say back taxes. and that they will learn english. many of them already have, and many of them are already paying taxes but not getting any credit for it. we can't run our economy without them. send those 11 million people home if you could ever find them, and it would be ugly. and so i suggest we're not going to round 'em up and deport them, nor should we. we have this debate, so let's not forget one fundamental issue, and that is who we are or what this nation was built upon. the dreams and the hard work of those who came here seeking a better life. the bottom line on immigration is that the status quo on immigration in our country is a

fundamental loser. i'm optimistic that this time we have an excellent shot at getting immigration reform done. it is essential to our economy, our country and our way of life. now, we're very proud to be working with the partners on this stage, and we will work with others as well, and we will make passage of immigration reform legislation one of our top priorities this year. so at this time i'd like to turn the podium over to dr. bennett duke, the vice president for public policy and research and at the ethics and religious liberty commission for the southern baptist convention. thank you very much for your anticipation. for your attention. >> good afternoon. glad to be here with you today. thanks for coming and being a part of this.

i'm just delighted to be here standing with so many folks with the business community, folks representing law enforcement. what you see up here is representative of a large slice of civil society saying that we need to come together to find a way to solve our nation's immigration crisis. now, each of us with different perspectives on this has different reasons for why we believe we need to resolve this. for us, for the faith community, for southern baptists especially, immigration reform is primarily, first and foremost, a moral issue. and also, quite frankly, just a basic humanitarian issue. when you come right down to it. first of all, when you think about it as, you know, as a moral issue, for us where we get our moral guidance is from the bible. we turn to the bible. you don't have to read very far

into your bible to see how god told his people to deal with the stranger in the midst of the nation that he himself established. the nation of israel was established by god. he set the boundaries and the parameters and the laws for that nation, and he gave it very clear directions for his people in that land on how to treat the non-israelite. and you can just start reading, and before you know it you come across as passage, for example, that say you should love the stranger in your midst like yourself. you know? that's pretty strong language. to love the stranger in your midst like yourself. you're not going to do the kinds of things to yourself that some people propose that we do to the person who is here illegally. so when we go to our bible, we read that, we understand that god an expectation for how a

people with power would treat those who are vulnerable and weak in their presence. um, you know, i think god has a lot of reasons for that. one is, certainly, that we understand b b b that these folks -- that these folks also are created in the image of god. they are as much image bearers of god as we are. there are as deserve bing of respect and dignity that comes with the fact that they are bearers of the image of god as we are. and we should treat them with that level of respect and dignity as well. and you just can't be doing that with the situation that we have in this country today. and that brings me to part of the humanitarian side of this. you just -- it is not possible to respond to the plight of those who are here living in the

shadows compassionately without actually speaking to their circumstances and trying to assess them. and i don't know, i don't know how you could have a clear conscience thinking that we're going to in some kind of way consign 12 million people possibly to perpetual poverty and as a perpetual under class in this country. we've never done that to a people. i can't imagine that we would do it today, and i can't imagine that we could do that with a clear conscience. it is certainly not the right things thing to do, it is, indeed, not the christian thing to do. so we're here in coalition with this broad group of folks because we believe this is a moral and humanitarian issue. we're already engaged on this as well. we're busy on the hill already visiting with congressmen and senators and their staff, and we're also busy out in the

country helping southern baptists and other evangelicals understand the issues. we, um, just kicked off on monday the i was a stranger campaign. some of you were probably on that press call. that campaign calls on christians simply to spend 40 days reading one bible passage a day about immigration reform, something that the bible has to say about immigration reform and then reflecting on that and letting god speak to them about what would be the christian response to the need of the undocumented here. we believe if you just go to your bible, you open your heart before god, god will lead you to say we need a just immigration reform this many this country that will -- in this country that will actually make it possible for us to get these folks on a path toward legal status and on the path towards prosperity in this nation as well. so i hope that you'll go to that web site. in fact, you can just go to the

immigration -- let's see, evangelicalimmigrationtable.org, find the information for i was a stranger, download the bookmark and join us in that bible reading and prayer campaign. i believe god will speak to you in the same way that he's spoken to us. immigration reform, just immigration reform is a top priority issue for the southern baptist convention's ethics and religious liberty commission. we do not intend to let this fail. we will stay on top of this until washington, d.c. and our country finally does what is right by the 12 million who are here looking to us to do something to help resolve their dilemma. thank you. >> thank you, barrett. our next speaker is attorney general greg zeller from the state of indiana. greg zeller was elected as indiana's 42nd attorney general in november of 2008 and just

last week was sworn in to a second term as state attorney general and has been an incredible ally for the issue in the state. thank you for joining us, greg. >> well, thank you, and i welcome the opportunity to join with these voices and call upon our federal government to rise above partisanship and rise to the occasion. i only speak as the elected attorney general from indiana, but i can tell you that most of my colleagues -- the other attorneys general throughout our country -- all share this sense of frustration that the federal government has failed in its responsibility in the area of immigration. we often complain that the federal government, let's say, overreaches into the role of the states, and i think it's borne of that frustration that a

number of states including indiana has tried in its own way to try to address the issues that washington has failed to address. in indiana we've had a bill that was passed that i was required to defend even after giving my legislature my legal counsel. we followed it all the way to the supreme court when the arizona case was taken up, filed an amicus brief. but i do know how to read a supreme court opinion and recognize, like most of the attorneys general, that it is a federal responsibility. but you've got to at least understand the frustration of our sister or states -- sister states that are trying to make up for the fact that washington has failed us. so this, this inability to act in washington is not something that states are able to do. so states have to act and likely

are going to continue to try to act in the vacuum even while there are obvious constitutional questions. one of the things that i wanted to focus on was as attorney general i work within the criminal justice system and particularly want to voice some of the concerns of our law enforcement officials. i think the requirement that our law enforcement officials at the state level somehow be deputized to be i.c.e. officials is simply not something that they're willing to do, nothing something that is really within their capacity to do and really takes their eye off the ball of maintaining the safety and security of the people of indiana. they also tell me that when they do have a stop and there's these concerns that are raised among undocumented, it can turn what would normally be a simple process of issuing a ticket into

what could be a troubling situation with somebody who is in fear of being detort ported -- deported. you have people that have a family someplace nearby, so the risks that are attendant to this raising the profile of having states' involvement is something that the law enforcement community is very concerned about. finally, i would leave it that as we look at the issue of federalism and we look at what the proper role of the states are and the proper role of the federal government, there's an awful lot of work being done by my colleagues to try to encourage washington to focus more on the role that they are given within our enumerated powers in the constitution and less on the areas that the states are quite capable of doing on their own. immigration is not one of those issues that states can do on their own. it's one of the reasons that we

have a federal government. and this failure of the federal government has jeopardized the rule of law and the safety and security of the people of our states. so again, i'm proud to join in these voices. the states don't all agree on what the proper federal response should be, but i can tell you that they all share the same frustration that i have and the people of my state. so i'll be willing to continue in this and continue to bring this issue to washington until, again, they rise above their partisanship and rise to the occasion. thank you. >> thank you very much, mr. attorney general. our next speaker is carlos gutierrez, vice chairman of citigroup and from 2005 to 2009 he was the 35th secretary of the u.s. department of commerce, former secretary gutierrez

served under president bush and before his public service within the administration, he was chairman and ceo of the kellogg company, a global company and marketer of a well known range of brands. mr. secretary, thank you for joining us. >> thank you. good afternoon to all. you know, 2013 is probably the first time that we're going to take another shot at sensible immigration reform since 2007. so there's a lesson here that if we don't get this right this time, we're probably going to have of to wait another five years. so it is absolutely essential that this become a real issue of substance and not an issue of political theater to see who can get, you know, the upper hand. since 2007 our economy has not been well served, so we know

that there are, indeed, centers that have opened up in canada because people can't find the scientists and the mathematicians here in the u.s. we know there are family farms that are shut down, others that have moved to mexico because they can't find workers. and the whole economy is suffering because we can't grow without immigration. and, you know, we're sort of staring in the face of a potential great stimulus here without it costing a trillion dollars. we've also seen the human complexity of immigration intensify. the kids who have been born here to undocumented parents, the kids who came here when they were 4 or 5 years old who know no other country but the u.s. parents who have worked in a job for 15 years and are hoping that, you know, that this is their future, that they can be part of the american dream. and every single day it just becomes more complicated.

and until lawmakers act, the president, the congress, we are just allowing this humanitarian situation to go on. and it just strikes me as so un-american that we ignore it. so, um, and again, ignoring the problem as we have seen doesn't make the problem go away. there has been consensus, i believe, that two things are not going to happen, two courses of action. on one hand we are not going to round up 12 million people and kick them out of the country. and i can't name anyone who has said that. whose point of view is that we do that. and i'd be incredibly embarrassed as a u.s. citizen that that would be our country's response to this.

and i don't think we all want that blemish on our history. so the way we deal with this becomes a permanent part of our history. we also know that the other extreme is we're not going to go out and, you know, give free passports to whoever wants one. so somewhere in the middle there is a solution. um, a lot of compromise, but it's going to take leadership. this is not going to happen with a tremendous amount of leadership from the president, from congress, but also as it has been mentioned, from business, from law enforcement, from the faith-based community. one thing that is different this time for our side of the aisle, i say ours as mine, the republican side, we have a super pac called republicans or for immigration reform. and we're going to do something that hasn't been done before in the past, we're going to put money behind the problem and support candidates who support immigration reform and give

cover to people to come out and admit that they are for immigration reform. if we don't get this right, shame on us, because this is about the future of the country, this is about competitiveness, this is about who's going to be the global economic leader of the 23st century. -- 21st century. if we get it right, then the 21st century is ours, and that's what's at stake in this effort and in getting this reform through. >> you know, the first time this has ever happened in a press conference, right? mr. secretary, thank you very much for joining us and thank you very much for those words. our final speaker is with the u.s. catholic conference of bishops, ambassador johnny young

s for the conference of catholic bishops. he is a former ambassador to five countries and currently oversees the u.s. bishops' outreach and service to refugees. he's an expert in foreign policy and migration trends worldwide. ambassador, thank you for joining us. >> thank you so much, ali. and thank you for the extra ambassadorship. i only had four. [laughter] i'd like to thank ali and the forum and all of you for the invitation to be here today to say a few words. and to, um, i'd also like to thank all of the other members of the panel here for their or contributions. i'm here to represent the conference of catholic bishops. it's known sometimes by just usccb. the conference has been engaged

in this issue of immigration reform for decades. we look forward to this debate and urge our elected officials not to lose this opportunity to reform a broken system. there are several areas the bishops will focus upon in this debate. first, there must be an automatic path to citizenship for the 11 million undocumented. we cannot and must not, excuse me, fall short of citizenship for the undocumented. where instead they receive legal status but no chance to become americans. we should not sanction a permanent underclass in this society without the full right that other americans possess. we have been down that road

before and with disastrous consequences. should the party of lincoln embrace a path to citizenship so that all persons in our society can earn the right to pursue the american dream in? i hope so. should the party of jefferson and our first african-american president agree to a bill that sanctions into law a permanent underclass? i would hope not. while there will be temptation to compromise on this issue and provide the undocumented less than full rights, we must resist in the temptation. we must resist this temptation and give them the chance to earn the right to become americans. it is the american way. second, the bishops will fight

to preserve an enhanced family unity in, as a cornerstone of our national immigration system. this principle has served the nation well over the past 200 years as immigrant families have helped build our nation. we must not forsake the family in this debate; mothers, fathers and children. preserving family reunification in and promoting economic growth through our immigration system are complimentary and not competing goals. finally, we will fight to preserve the right of both u.s. and foreign-born workers in this debate. we would like to join with our labor and business allies in fashioning a future flow worker

program that features the appropriate workplace and wage protections. so that the rights of all workers and the needs of the business commitment are served. business community are served. congress and the administration must seize this moment and reform our broken system. families are being divided, and migrants continue to die in the american desert. in this suffering must -- this suffering must end. we look forward to working with our elected officials and all of goodwill towards this end. thank you. >> thank you, ambassador. so as you can see by this range of perspectives that the differences are not great, but the unity is very clear, that congress -- that the 113th congress must take advantage of the opportunity that lies ahead to pass broad immigration

reform. so with this, i would like to take questions from the press and, please, as you ask your question, please introduce yourself, your name as well as your outlet. and, again, we'll only take questions from the working press. >> bill gibson from the south florida sun sentinel. i'd like to hear more about the republic super pac. will jeb bush and business people from some of the high-impact states like florida be a part of that? >> at this point we have -- [laughter] the, we're getting all the paperwork together, and we should be ready to go very, very soon. obviously, the role of the super pac is to raise money so that we in turn can use that to support immigration in districts where a republican is supportive. we can't, as you know, we can't

give the money to a candidate, nor can we, -- nor can we say vote for this man or this woman, but we can support the concept in those critical districts. you'll have to ask governor bush what his plans are and what he's doing. i would assume that anything it is a related to immigration will catch his interest. um, but we expect to do this in the right way, in a big way and to have an impact. because up til now it's been a lot of, you know, working the hill, but we're going to have to put more muscle behind i. -- behind it. >> great, thank you. >> [inaudible] >> please introduce yourself, sorry. >> oh, i'm sorry -- [inaudible] you have representatives talking about a comprehensive package, and you have representatives talking about several bills

related to immigration. so what do you say is the right path to work on this? >> you know, the answer to that, i think, can be found in the hill. because at the end of the day, they have to make it work. in 2007 we tried a comprehensive approach, and while it's not a flawed approach, what you have to watch out for is that you hold back easy things physical you get the very complicated things worked out. and that's part of the problem of a comprehensive approach. on a -- senator rubio has come out with a -- the interesting thing with that is that you break up a 750-page bill into manageable pieces, and it also becomes more transparent to the public. you know, we had a 750-page bill, a comprehensive approach, and it was dismissed by one

word: amnesty. and that's the trap of these large, comprehensive, very complex bills. how -- having said that, i think that it's a tactical issue, and i hope it's resolved as soon as possible because there's so many other bigger problems that have to be addressed. um, but i think they can both work with the leadership and the will to get it done. >> excuse me, let me just make a comment about that. i don't think this is a problem. there is a great advantage to a comprehensive bill. we can fix it and get it done. there is a disadvantage to a piecemeal bill if you pass, for example, issues for highly educated people to get visas, then you -- and they are all taken care of, then you lose certain amount of support for the other issues. i don't think we should decide that now. i think as senator rubio's doing a great service by raising these

issues and addressing it. i think our colleagues here at this meeting, i met this morning with mr. trumka who runs the afl-cio. he and i, actually, talk a lot. i believe we ought to just move forward on all of the arrangements so that the hill and, will develop an understanding about all these issues and then finally decide whether they'll do it in one, two or three pieces. and that is the least of our worries. the fact is that they do it, and for us we'll continue to talk about a comprehensive bill. finish. >> okay. barrett? >> um, first of all, i'm delighted that senator rubio is helping folks on the republican side of the aisle take the issue of immigrationing reform -- immigration reform as seriously as he's taking it. so he is providing leadership on that, and we're appreciative of that. i think it's great to see a movement on both sides of the aisle on this whether or not

it's a comprehensive bill or whether it's done in this individual pieces, i think, is to be determined by leadership. in the house and the senate and in consultation with the president. i don't know exactly how they get that done, but right now at least they're both working in the right direction. >> next question. >> cameron joseph from the hill. going back a little bit to what you were talking about, meeting with richard trumka. i know one of the big sticking points was the guest worker program and what you do with future immigration in the 2007 debate. i'm bond orerring whether, what type of progress you two have made and whether this is any comity between business and labor on this. and going back to what ambassador young was saying, i just want to know what your thoughts in term ors of what he was saying, permanent status in the u.s. >> well, first of all, mr. trumka and i this morning were pleased to report to each other that our staffs are working very well together on these issues.

you're right, that's one of the issues that has to be resolved, but we're both committed to getting a bill, and i think if we can come to a resolution on those subjects, you might see things move a little more quickly. the question of citizenship is one that has a great passionate kind of response from some people. let's take this in a sequential way. first of all, we have to take these 11, 12, however many million people they are out of the shadows. we have to give them a legitimate existence in this country; a way that they can pay taxes, a way that they can drive cars, a way that they can live as human beings in this country. and if you want to talk from there to a path to citizenship, i think we can build a consensus around that by the steps that would be required. i think it would be terrible to

say that we're going to have, make them legal and they would never have an opportunity for citizenship. i think that would, that would say something about this that we wouldn't like. the only, the ambassador and i could probably debate the strategy on how to get from here to there, but there's no question that what's needed immediately is legalization and a path to get to where we'd eventually like to be. >> okay, thank you. >> um, hi -- [inaudible] world journal. difference between now and 2007 when you were talking to smoothers kennedy and mccain -- senators kennedy and mccain, and are you more hopeful this time? thanks. >> you know, i believe -- and i say this somewhat anecdotally, but there have been more people coming out in favor.

there is, there are people who have moderated their stance on this from six years ago, and i think part of that is just an understanding that no action is very bad for the country. i also would like to say because i believe you have an asian background? you know, we're -- the question about future flow is excellent. this is not just about hispanic immigration, or or this is not just about undocumented hispanic immigration. this is about immigration from the world. asians are making a great contribution in this country. um, africans are making great contribution in this country. latin americans are making great contributions. we think about the future flow, because this was an issue in 2007, and it was, it just goes to show that it's not just one party that has a problem with these things. without the future flow, we are in trouble. without a strategic future flow,

we will, we'll have another undocumented problem in five years. and unless people want to recognize that reality and take the vote and do what's right for the country, we're just going to continue spinning our wheels. so i think a lot has changed. you know, we talk about, ali talked about business, badges and bibles. i think all three of those groups could have done more in 2007. >> um, do you agree with mr. donahue's concept having -- [inaudible] different paths for visas and according to the economy and -- >> yeah, there has to be a way of, you know, a lot of our laws date back to the 1950s.

some to the 1960s when some of the, you know -- so there has to be a way of bringing it up-to-date. and those are things that will have to be, you know, negotiated. i would just say that it can't all be managed by a centralized system in washington where washington decides how many nurses we need and washington decides how many, you know, farm workers we need. so business will have to play a role, um, and business will have to be the determining factor in order to make the work, you know n practical way. >> just think for a minute that 10,000 people a day retire in the united states seven days a week, 365 days a year. we are a nation with unemployment and with a great shortage of people to go to work

in specific jobs. finish and the secretary's -- and the secretary's point is right on target. if you try and do this with a master overseer of exactly how many left-handed nurses and right--handed carpenters get into the united states, we're doing the wrong thing. we need to do it on demand and on need. and if we have an extraordinary need to be competitive and, by the way, many because of the price of energy and the fact that the country now is probably will have and has the access to more energy than anyone else, you're going to see manufacturing jobs coming back to the united states. and i, i think right now there's a couple of million people that we could hire if they had the skills, if they had the education, if they had some of the other requirements to fitting into a high-tech,

high-performance economy. and it's very hard to explain. how can you have that kind of unemployment and have that high need? you also, the story in "the new york times" the other day had a lot of other parts to it about, you know, they're drilling for a lot of oil in north dakota, and we don't have a whole lot of people who want to move there. it's a real complicated issue. >> [inaudible] >> you all have mentioned senator rubio's leadership role, and -- [inaudible] i was wondering are there any house republicans that are champions for this and what sort of feedback or indications do you get from house leadership that they're willing to take this up either at a step by step basis or a comprehensive bill? [inaudible] >> well, that's true just about every issue that comes, comes to the congress. doesn't happen in the senate, it's not going to happen. doesn't happen in the house, it's not going to happen. we've seen a lot of leadership in the house in the last

session. we believe that there is a growing number of people that would like to resolve this issue. this is a matter of, you know, the snowball going down the hill. you start with a small ball, you start rolling, and it gets bigger and bigger. i'm not worried about whether we can get the votes in the house if we can get an agreement between labor and management and the faith-based people and other groups that have the business. and if we can get that together, we'll get the votes. when you have 14 different opinions and even's disagreeing with each other, it's harder to get the votes. >> [inaudible] >> sure. we're going to be visiting with republican members and staff beginning even next week, and we've already had visits. we will continue to do that on the house side. we've already spoken with a

number of folks in the house to talk with them about immigration reform. and there is definitely a very good development on the republican side of the house at this point. i'm not sure they're as far along as senator rubio is in the senate, but i do think they're all thinking along very similar lines, and i think that as they continue to talk with each other and they continue to talk between the house and the senate that we're going to get to that place. i think that the determination is there at this point and that as has been said it's the folks sitting up here -- if the folks sitting up here continue to press this case, i think we will get to a point where everyone is agreeing on what the big pieces are, can and then we'll -- and then we'll be able to work to something everybody can agree on. [inaudible conversations] >> i just wanted to share with

you some of the things that we're doing at the conference. one of the things that we will be doing shortly is we will have a gathering of, an annual gathering of something called the catholic social ministry gathering and that will bring to washington about seven or or eight hundred b catholics from all over the united states. while they're here, they will have door knocks, and immigration reform is one of the key program features of in the year's gathering -- of this year's gathering of the catholic social ministry. the second thing is we have something called the justice for immigrants campaign, and we have already begun a postcard campaign to senators and congressmen, you know, asking for their support and asking them to push hard on thissish shy. so a lot of -- on issue. so a lot of activity already.

>> -- [inaudible] with "the washington post." president obama, of course, promised in his first term to take a leadership role on immigration reform and disappointed many supporters in the fact that he didn't get comprehensive reform moving. he's pledged again to do so. at his first press conference in november, he wanted to see a bill early on this next term. now he's introduced yesterday legislative ideas for gun control, he's got another debate over fiscal policy coming. what does leadership mean from the president, in your mind? what do you want to hear in the state of the union, and how much effort needs to come from the white house, or is there a better idea that something would emerge from the senate and the president would take more of a support i have role in some way? -- supportive role in some way? >> it's a very good question, and i think part of the problem is we don't -- the answer here is not to hear another great speech about immigration reform, okay? so we need some alaska. but my sense is that this is what happens when immigration reform is important, but it's not the number one issue.

so, you know, you can keep on sort of delaying it because you've got to take care of the fiscal cliff which now looks like it's going to be a fiscal stairway that goes all the way to the end of the term. i don't think this is going to be over soon. it's going to be, you know, a ongoing negotiation. guns, i think that has sur or passed immigration -- surpassed immigration reform on priorities. and i'm not making a judgment here, i'm just trying to state some facts. so you're right, this has to become the number one priority for the president and for congress to get people together and say we're going to fix this problem, because it's important enough to be fixed. and that hasn't happened yet. and i think it has to be a lot more than just, you know, a couple of very nice sentences in the state of the union address. >> i would only add that i think it's incumbent upon us as citizens, as members of groups,

as add slow e candidates, as -- as advocates, as nongovernmental organizations to keep the pressure on the president so that he remains focused on this issue. there will always be different issues that will come up. no one can predict b what his calendar's going to be for the next x number of months or so. but to keep that pressure on him, to keep him focused on this issue. >> and i want to reiterate what i said at the beginning. we believe that immigration reform is different in that it has a path to deep bipartisan support. and while, yes, congress does have many other important issues to grapple with as well as the administration, just this range of speakers today and what we've seen over the last two years shows that conservatives, moderates and liberals across the country want this president and this congress to act, and that's different from any other issue. >> [inaudible] me again. so democrats are talking in this

deal about a direct path to citizenship, but senator rubio is talking about a transitional visa and then access to the legal system that we have now. it's a very different tack. what would you -- b what is the right path? >> from the standpoint of republicans for immigration reform, we support immigration reform. we support something that can get passed. we support, you know, so we're not going to second guess people as long as they're making progress. in 2006 and '7, one of the guidelines that we had was that we didn't want the undocumented immigrants to cut in front of the line of people that had been waiting, um, to do it in a p proper way. so the result or the solution

was a legalization process, they are legal. now, not everyone wants to be a u.s. citizen. some may want to go back home and may not want to go through the process. but if they do want u.s. citizenship and a green card, then there's a process for that. the important thing is that they're legal, and they can come out of the shadows, as tom said. that was the approach then, and we'll see how the two parties, you know, come to an agreement on what they should be. >> let's take two last questions here. one right here and one in the back. >> [inaudible] >> you know, it's very natural thing for the press and the media to look for the differences. i mean, that's how you write a story. of if you have everybody agreeing, you probably won't write the story. certainly not in an aggressive way. this issue doesn't bother me or

worry me one bit. if we get to the point where we have a program, a program to deal with immigration in this country in a fundamental way, we'll resolve that question. and if you want to know what the resolution is going to be in my opinion, it's going to be a progressive issue. we do this now, we set a series of steps in place to do this as we go forward. and i think everybody here has said that. there needs to be a process to citizenship, a process is something that takes time, but it's set in place, and we follow it. and that's where we're probably going to go. look, if those are the issues we have to resolve, we're in great shape. we'll get a bill. you know, if i might suggest, mr. chairman, the lady who's in the back who's got a camera who will put you on tv has been trying to ask a question all afternoon, so fair deal? [laughter] >> oh, boy.

>> i was going to ask if you could come to the microphone because my camera -- [inaudible] [laughter] secretary, it will get to you later in spanish, so don't go away. >> if she's going to do it in spanish, who's going to do it? i can't do it. [laughter] >> you said that for the chamber immigration reform is going to be a priority, and i wondered if you could expand a little bit more on that. exactly what is the chamber going to do besides going onto the hill and lobbying? what else as an organization can you do? and the second thing is that this could be for anybody on the panel. we know there's a lot of discussion going on right now as to what is going to be in the bill. i think there's a broad consensus about what needs to be in. but there's discussion as to who's going to present the bill. should it be the white house, should it be the white house and then senate democrats, or should

we wait for a, um, bipartisan bill? what would you prefer to see presented, and what do you think would send a more clear or more supportive message? .. >> people in the critical jobs, and we still have to finish the reorganization of the house and the senate which happens every year, change, so i think -- i think i would prefer not to have a whole lot of one off bills right now. i'd wait a few weeks or months until we come to a much closer

consensus, and i think we'd have a better chance of passing something through both houses. i don't much care where it starts. i'd like to have all three groups have an understanding of what's going to be, and we can let them all go in the back room. we don't have to be there and figure out what the sequence will be. on the fact of what the chamber is going to do is we'll do it here in washington, and we'll do it around the country. we have thousands of state and local chambers around the country. we have 900 associations, business organizations, from different industries that have representatives all around the country. we have a million and millions of people on our grassroots network. that's what they thought about that. we will put that all to work when the time is right. right now, we're building consensus when there are bills to be advanced.

we'll do that. the worst thing to do is talk when nobody's listening. we have to build a consensus, get people ready to listen, and then go out and advocate that in a very strong way. thank you. >> [inaudible] [inaudible conversations] [speaking in native tongue] >>

>> yes. [speaking spanish] [speaking spanish]

[speaking spanish] >> thank you. i want to thank tom donohue at

the u.s. chamber of commerce. attorney gutierrez, the libber convention, and then ambassador johnny young, thank you very much, everybody. [inaudible conversations] [inaudible conversations]

>> he talked about this dream he had. he had it for years, the american dream, and it had been his dream. he was in detroit a few months before, and he had talked about, you know, i have a dream that america will someday realize all these principles in the declaration of independence, and so i think he was just inspired by that moment. >> sunday on "after words," recalling the journey as a civil

rights activist participating in the 1963 march on washington to prominent historian editor of martin king jr.'s papers. >> this past tuesday, aarp's eke barry rand talked about economic issues facing middle class seniors and charges to achieving financially secure retirement. he spoke here in washington at the national press club for just over an hour. [applause] >> well, good morning, everyone. thank you, more water. i needed that. i thought i would answer your questions. how many of you think you're part of the middle class?

how many of you think you'll have a safe and prosperous retirement, financially? you should all be interested in this one. [laughter] this will be both from a business perspective as you cover this and also a personal perspective so i appreciate the pictures, but let's get started. the prosperity of the middle class is the basis american life for the past 60 years, but today, that prosperity is eluding many individuals and their families for reasons beyond their control. the decline of the middle class threatens our ability to fund health and retirement programs, to maintain a safety net for the most vulnerable, and to invest in our future. it threatens the hopes and

dreams of generations of americans for themselves and their children. a declining middle class makes upward mobility a better life including more secure retirement than the impossible dream. could it be the impossible dream? well, good morning, everyone. welcome to the aarp's middle class 2013. airplane work -- aarp works to make life better for all, fighting for middle class because these issues are important to our members, people 50-plus and their families, and in august 2011, aarp's public policy institute launched the yearlong study of the well being of america's middle class with a focus on prospects for financially secure retirement. today, we will share what we've learned from that study in the policy implications going forward, specifically these three aspects. one, how does the decline of the

middle class over the last 30 years has affected real people? our future generations, retirees, 20, 30, 40, 50-year-olds of the day will be affected if we don't turn this around, and, three, what we need to do as a nation to restore prosperity to the middle class and keep the american dream alive. now, over the past generation, more and more of the middle class fell off the cliff into economic insecurity and even poverty. pulled down by a lack of job opportunities, rising health care costs, inadequate savings, declining home values, a lack of consumer protection. stagnant wages that have not kept pace with the cost of meeting basic needs. the great recession and the ongoing financial crisis only tightens the squeeze on middle class families that cast a show do on --

shadow on the prospects of today's worker. this took a toll on the middle class family, never felt more insecure. as a woman in milwaukee told us, i feel like i'm just one big crisis away from utter devra -- devastation. she is not alone. according to the tracking index, a percentage of those in middle class who felt secure dropped from 26% to 16% from 2004 to 2010. the numbers are lower for african-american and hispanic middle income families only 10% and 1 # 1% -- 11% respectively. how do middle class families cope? they typically do thee things. one, at least one, and often both wage earners work longer, delay retirement, and many who already retired end up going back to work if they can't find a job.

two, they reduce their standard of living and rely on government programs to help them make ends meet, or they take on more debt, borrowing against their homes and 401(k)s, running up credit card balances, taking out loans and borrowing from family members. as a result, the median debt of middle class families increased nearly 3 00% over -- 300% over the past decade. maurnne from milwaukee, a prime example. her husband lost his job, but lost that job in march. working two part-time jobs without benefits. when her husband lost his job last spring, they needed health insurance, and they quickly found that the costs were too

high and too high for their budget. he bought a catastrophic plan with a high deductible saving $200 a month, but gave them less coverage. her husband found a job as a clerk in the grocery store deli resulting in a 60% cut in the income. suddenly, their retirement is uncertain and very scary. they are thinking about starting to collect social security at age 64 to pay the bills even though they would miss on on a fuller benefit by waiting a couple of years. unfortunately, his story is not unique. aarp's own anxiety index tells us that the problem concerns about people 50-plus and their families are all remitted to health and financial security. having medicare and sports illustrated benefits available in the future, having adequate health insurance coverage, and

paying for health care speanses. we hear this from members all the time. a member in massachusetts sent me this letter. social security will be my main source of income when i retire, if i ever get to. i have a 401(k), but it's been hit hard. don't think i can catch up by the time i'm 65. without medicare, i will never be able to retire, and please do know eliminate or cut benefits to those of us who already put in hard earned dollars all of our lives. there are concerns that reflect the larger trend. the latest data show that typical american families got poorer in the last decade, 15% of americans live in poverty, the highest level since 1993. in 2012, the number of americans living under 125% of poverty

reached an all-time high of 66 million people. 66 million americans. more americans reaching their 60s with so much debt they can't afford to retire. more low and middle income households turning to credit cards to meet daily living expenses. the number of uninsured, 16% of the population, now combines 25% in the district of columbia. that's hard to digest. the possible of downward mobility and the environment is a looming reality for all workers, and, in fact, the ranks are not climbing to levels seen since the last of the century, erasing the gains from the war in the poverty of 60s. unless we reverse the trends

driving the decline of the middle class, many of today's middle class workers will not have a middle class retirement. will not have one. they will be low income in retirement. here's why. two main reasons. rising health care costs and financial insecurity. rising health care costs wipe out any gains that middle class families were objected to obtain. the poverty rates is projected to decline, that decline will be adversely wiped out by rising out of pocket costs which will take an increasing share of the retirement income. unless we build on reform, those 25 to 34 will be less likely than current retirees to maintain a standard of living in

retirement. all because of rising health care costs, and this does not factor in through the rising costs of long term care. the second reason, financial insecurity. the middle class was hit hard by the great recession, especially with loss of jobs and falling home values and foreclosures and reduced savings. instead of creating pensions that helped people maintain a decent standard of living as they get older, we're seeing traditional or defined benefit pensions coverage erode or disappear all together. 75% of americans near retirement age in 2010 had less than $30,000 in the retirement account. roughly half of all workers do not have a retirement plan at all. for most of those that do, the amount in the 401(k) pays them a retirement benefit of less than $80 a month for life.

for life. now, how do you live on that? the answer is not well. now continuing to work low hours is one of the key ways to maintain security in retirement, these trends place even more importance on social security as a source of a retirement income. in fact, social security will be the main source of retirement income for the future retirees adversely all income levels. for nearly one-third of middle class workers who fall into having low income in retirement, social security will represent over 80% of the retirement income. obviously, this is important to all people. now, i've talked about rising health care costs, talked about financial insecurity, but also want to mention a third factor, the rising costs of higher

education. a research shows without question the most important contributor to middle class stability is having a college degree or post secondary education. it is the gateway to the american dream, and, frankly, a key to restoring prosperity to the middle class. the facts are clear. the median weekly income for high school graduates in 2011 was more than 40% less than that of those with a higher education. what a gap. 40% less. moreover, the unemployment rate for workers with just a high school diploma is over 6%, more than double the rate of those with post secretary degrees. african-americans, latinos lagged far behind whites in this respect, just 13% of hispanics and 18% of african-americans age 25 and older as a higher education compared with 31% of

whites. now, the cost of higher education is now out of reach for many middle class families, and student loan debt is huge drain on the income of middle class families. the facts according to the report from the federal reserve bank of new york, americans 60 and older still owe roughly $36 billion in student loans. more than 10% are delinquent. older adults postponing retirement in order to pay off student loan debt accumulated by their children or grandchildren. now, none of this paints a pretty picture, and unless we figure out a way to reverse the downward spiral of the mid m class, the probability of the next generation being worse off than their parents is very high. now, we can't allow that to happen. what do we do? how do we rebuild the middle

class to once again ensure everyone has an opportunity to achieve the american dream? the first thing we have to do is to broaden the current debate in washington from the narrow lens of deficit reduction so the larger goal of economic growth and maintaining the health and economic security of all americans. now, there's no question that reducing the federal deficit is a worthwhile goal. nobody's going to argue with that. we need to address our nation's long term physical problem. we understand that. they affect all of us. most importantly our children and our grandchildren. their future would not be bright if they are drowning in red ink of budget deficits and soaring national debt. we understand that too. however, their futures will not be very bright if they can't afford health care or if they can't afford a quality education

or if they don't have the opportunity to attain long term financial security. leaving them with less economic security by weakening social security and medicare would be just as bad, and for many people, it would be worse, and if we weaken social security and medicare to the point of their parents and grandparents to no longer live with dignity and purpose, we will be risking their futures as well. as a nation, we have to broaden the focus. the goal should be improved economic growth for the nation and policies that secure health and economic security of the current and future generations. for current and future generations. washington, their budget debate is focused on big numbers, but it's about people and their futures. people and futures. a budget is not in and of

itself, but a reflection of our nation's priorities and our goals. now, we cannot make budget sources without considering the consequences of those choices on people. cutting social security and medicare benefits leavings too many people with nothing left at the end of the much. decreasing the federal deficit at the expense of medicare and social security also ignores the public's overwhelming support and need for these programs as well as the vitality and vitally important role they play and will continue to play in helping people obtain a secure retirement. now, we must look at retirement, retirement security broadly. a broader view. congress and the president must work together and focus on larger national goals of economic growth and jobs and health, financial security, and enacting affordable policies to

meet those goals. now, let's not kid ourselves. we can't achieve those goals by simply cutting spending or just increasing revenue. we obviously need both. the social compact that requires this generation leave the next generation a stronger rather than a weaker economy also requires this generation to leave the next generation a more secure rather than a weaker retirement. the pugh research, that center renally asked people what it takes to be a part of the middle class. they said the answer of five things. not new news to you, but we'll reenforce it. a secure job, health insurance, owning a home, a college education of some form of higher education, and stocks and bonds and other investments. in other words, to be able to save and invest for the future

let me talk about jobs for a moment. jobs the key to achieving the american dream, putting ourselves, our country back on the road to prosperity and keeping america come perspectivetive in a new global economy. without jobs, today's workers have no chance for a middle class retirement, and economic growth and prosperity for the middle class and others is not possible. as it is, more middle class worker have to work longer to maintain a decent standard of living and retirement. today, millions of workers remain out of work in the wake of the great recession. during 20 # 12, workers 55 and older were unemployed on average for more than a year. now, we need to preserve the middle class jobs that offer opportunity for advancement. we need to em prove the pay and quality of lower skill jobs that represent the vast growing occupations in the decades ahead. now, the sec thing, the second

thing we have to do is tackle the high cost of health care. one of the most significant factors driving people out of the middle class. rising costs have a negative impact on the federal program such as medicare and medicaid as well as the cost of state government and employees and into the percentage of our nation's gdp dedicated to health care has nearly doubled from 10% to nearly 20% over the last generation, and it's still rising. that's more than any other developed country with no better outcome. we have the highest in the world, the highest medical costs in the world. we cannot disstain an every increasing share of output going to health care, especially when the institute of medicine estimates that as much as one-third of health spending is considered wasteful or

inefficient. the affordable care act begins to set in motion what needs to be done to reduce health care costs, but we have to do more. policymakers must not simply reduce the federal share of health care costs by just shifting the cost to government or other payers. just shifting it. not solving it, just shifting it. in fact, it will make it work because it fails to tackle the real underlying issue of reigning in high growth and health costs throughout the system and the percentage of gdp that goes to health care. that's not solved. you can't solve it by just shifting. an champ -- an example of the approach is raising the health care eligibility age. the end result of the policy is to lower costs for the program by shifting costs from the federal government to employers and states and families on medicare including those in the

middle class. this only drives seniors to a more costly and less efficient providers which, in turn, raises the total health spending in the economy, nothing to solve. now, this is pure follow -- pure folly and very dangerous. a better approach is to lower the growth in the health care spending system. why? if we focus on lowering the growth rates of costs throughout the health care system, we also lower the cost of medicare and medicaid. an analysis by the president's council of economic advisers shows lowering the growth rates of health care costs by 1.5% per year will increase the real income of middle class families by $2600 in 2020. it would be $10,000 in 2030. it will be $24,300 by 2040. now, that's real relief for real

people. all of this comes back to the impact on people, impact on your friends, your family, your children. we can't just cut medicare or raise the eligibility age to reduce the deficit. we have to make it work more first timely. we have to lower the growth and costs to keep it sustainable for the generations to come. the affordable care act puts us on at least a path, the aca achieved $716 billion in medicare savings, and that's more that was achieved in the physical cliff deal on revenues. those savings were achieved without cutting a dime of guaranteed benefits so there is another way. by taking steps to remove waste and fraud and inefficiency in medicare, we have been able to reinvest some of those savings into lowering costs for beneficiaries and medicare by

filling in gaps in the program. i'll give you some examples. most of you are aware of it. closing the donut hole in part d drug coverage and providing preventative care, and it's working. more than 5.2 million people with medicare have saved 3.9 billion. last year, people in the donut hole saved an average of $770 on prescription drugs alone. now, at the same time, the aca made medicare more secure extending the financial life by seven years. it also helped reduce the rising costs of medicare, and it did so without taking a dime from a person's guaranteed benefit. there is another way. now, more needs to be done, moving forward if we per sue additional reforms in medicare and medicaid such as payment innovations to promote value and not volume, measures to lower

drug costs, providing consumers with better information on costs and quality, an emphasis on improving the health care delivery system like integrated care programs, and continuing efforts to make the program more efficient and to reduce waste. now, we will bring sufficient savings to the programs to spur innovation, spur innovative cost reduction in private insurance, and most importantly, help people get healthier and stay healthier which reduces health care costs. now, we also have to address the high cost of long term care, and that means shoring up the medicaid program. medicaid is disregarded as a program for the poor. you know that. when in reality, medicaid has a huge impact on the middle class as well. whether we like to admit it or not, medicaid is our country's

long term care program. in fact, medicaid pays for roughly two-thirds of the beds in nursing homes nationwide. the cost of long term care is so expensive that many middle class americans after spending all their own savings end up relying on medicaid to pay for the care. now, this is an issue we have to face, and it does affect all of us. that's why i was glad to see the fiscal cliff legislation passed by congress and signed by the president to create a bipartisan commission on long term care. it's a positive step. now, third issue we have to address is a low saiings rate in the large gap one has to make is over $6 trillion, $6 trillion between what individuals saved and what they will need in retirement. now, that's a huge gap. that's god to get your attention

because it has to imply what will happen to people in retirement. will you retire and have the good life that you planned? combination of high unemployment, low savings, the tradition, or defined benefit pensions, decreased home values and longer life expectancy means too few accumulate enough to last through their lifetime. now, we have to do more to increase access and incentives to people to save. social security remains the critical foundation for income security for the overwhelmingly majority of people. because of low savings rates and high health care costs, hiewch retirees rely on it even more. efforts to strengthen social security for the future must take into account retirement savings gaps. what is the gap?

the fact that percentage of income declines due to the rise in the normal retirement age of 67. social security insolvency is a major concern, but we can't address solvency without taking into consideration adequacy. solvency, but also adequacy. simply looking at solvency without considering our adequacy, again, misses the larger goal of shoring up the income security needs of this nation. now, how we achieve solvency matters to government, the economy, and to people. we look to protect and strengthen social security. we are guided by some basic principles. any changes in social security should be discussed as part of a broader conversation about how

to help americans prepare for secure retirement. if you pay into social security, you should receive the benefits you earned over a lifetime of hard work. your social security benefits keep up with inflation for as long as you live, and you should continue to be covered in case you become disabled and can no longer work and your families should continue to be protected if you, unfortunately, die, which all of us will. at aarp, we're also providing educational support and advocate for policies to help people save. we encourage better pensions and more private savings in addition to not at the expense of social security. look, this is all about people and not just numbers, not just numbers. our fear is that the recent

debate is that washington forgot that. focusing on incomes of over $400,000 a year. what's that? 2%? what happens to the other 98%? typical senior has app income of only about $20,000 a year. that's a huge gap. that's unimaginable. let me repeat that. the typical senior has an income of only about $20,000 a year. for most of them, their social security benefit makes up a large chunk of that income. now, there are a lot of things we can do to ensure social security remains solvent and provides an adequate benefit, and now and also into the future, but the proposed use, chained tpi is one of the worst. why? because it cuts benefits of those who are least able to

afford it. the oldest and most vulnerable among us. the change cpi cuts one full month's income from a 90-year-old's beneficiary annual benefit, one full month at 92. what are the odds if they have not a need for that money? social security was designed more than 75 years ago at a time when many women didn't work -- glad that's over with -- most lasted forever, and people generally didn't live as long, and now we need to make sure that the program serves the need in the change of demographics for the next 75 years. this does not do that. we need a robust national debate focusing on the role of social security and helping future generations achieve a secure retirement. over the last year, we've been reaching out across the country

to our members, people 50-plus, to get their ideas on securing social security, medicare for future generations. initiative is what many have heard about, and more than 6.3 # million people have responded so far. 6.3 million people. they have considered a number of options, but two points are clear. first, they do not believe that social security should be cut to deal with problems in the rest of the budget. second, they believe social security is important to their retirement security, and they are willing to increase contributions in order to maintain benefits. now, that's why we must address the future of social security as a separate process with a goal of strengthening it. now, to help people achieve a secure retirement, not to reduce the budget deficit. aarp is ready to have that

discussion right now. whatever congress is ready to address the future of social security as part of a broader discussion on helping people achieve a secure retirement, we will engage in that debate. aarp is not willing to discuss the future of social security as part of a deficit reduction debate. the point is that budgets matter, but people matter more, and, yes, we need to make adjustments to medicare and social security and medicaid and aarp members realize that, but we need to do so without compromising the health and retirement security of american people or undermining the values that we cherish. that's why we need a full blown national discussion of how to ensure social security continues to contribute to the retirement security of older americans in the future. now and the future, and not in the context of reducing a federal deficit it did not

create with the goal of helping people achieving retirement security. for all of those who say social security has cricketed to the deficit, i hate to tell you, you're wrong. you heard it on tv. it's not right. i received the letter from philip, an aarp member in colorado. summed it up very well. social security and medicare, he said, are the foundation of most american's futures. rightly or wrongly, they are. now, we can make them secure, but would not happen if we don't find ways to have a bipartisan solution. this, quite frankly, is our challenge. everyone knows that also. we have to approach rebuilding the middle class or lose it. issues like health care costs, jobs, savings, income security,

the cost of education, and the affordability of housing are part of a total life experience of individuals and families. they are interrelated. now, how we deal with one affects the other. they are also intergenerational. the cost of college has impact on parents who are paying more for college. young adults who can't find jobs or afford their own housing often move back into their parents home. anybody feeling that yet? there you go. many adults are not only supporting their young adult children, but also caring for their aging parents. anybody have that experience? some families, this is a choice. for many others, however, it's the cost of the middle class decline. either way, it's all interrelated. finally, this is not just about economics, but a strong middle

class is the bedrock of a functioning society. an ever-widening gap between the haves and have-nots leads to instability of families and much more difficult for families to move up the economic socioladder do achieve the american dream and live their best life. in the end, we have to ask ourselves, what kind of an america do we want? what kind of life do we want for our kids and our grandkids? for aarp, the answer is clear. we want a society in which everyone lives with dignity and purpose and fulfills their goals and dreams, a life with access to affordable quality health care and the opportunity to achieve lifelong financial security. a life where everyone has a realistic chance to per sue and achieve the american dream whether they are young or old.

now, former congresswoman barbara jordan put it this way. what people want is this way. they want an america as good as its promise, the great america as good as its promise, we have to rebuild and restore prosperity to the middle class. at aarp, we're committed to that goal. we are committed to the helping workers achieve goals whether it means finding a way to see the challenging work force or turn their life's passions into their life's work by starting their own business. we are committed to improving medicare to make it sustainable and slowing the growth of costs throughout the health care system. we're committing to strengthening social security by restoring long term solvency while main taping adequacy. now, we're committed to finding ways to help close the gap between what people have savedded and what they will need to live in retirement. we're committed to reducing the

deficit, but not by putting health and financial security of the future in the current generation at risk. in short, we're committed to rebuilding and restoring prosperity to the middle class. i thank you for your time and attention. hopefully, you have related to some of these, and if you have, it's been a successful meeting to you, and i appreciate your time. thank you. [applause] >> thank you, mr. rand, now i want to introduce dr. deborah whitman, policy for international who oversees the policy institute and the middle class security project. she is an authority on i aging issues and dead kaled the career to solving problems with economic and health security and other issues leading to

population aging. dr. whitman. [applause] good morning. barry rand covered a lot of ground so i want to take a few minutes to focus on issues he raised and talk about policies to pursue to strengthen the middle class. today, we're releasing nine research papers from aarp's public policy institute that explore critical elements affecting middle class success. these include income, assets, housing, health care, and education. our research demonstrates these elements have combined to make it increasingly difficult for families to maintain their standard of living. there are many important take aways from the studies, but i want to point out just a few. first, millions and millions of

americans who consider themselves who worked all of their lives and currently consider themselves part of the middle class will face a decline in the standard of living when they retire. this is not just a concern for people who are older now or even in middle age. if current trends continue, what we consider today as a middle class retirement will be more elusive for young people and future generations. as barry said, the erosion of retirement security for the middle class makes a guarantee protection of social security and medicare even more important for future generations. proposals to weaken social security such as switching to the wrong inflation index or medicare that has a higher eligibility age would be more harmful to middle class families than a lot of people in washington realize.

the research funding today makes this clear. they show that middle class is actually shrinking, dropping 10 percentage points from 1970s, and median income for families has fallen by 8% between 2000 and 2011, and it's lower today than it was in 1997. we also found that all americans, but especially older americans, are carrying a lot more debt. our research found that middle income individuals over age 50 who keep balances on their credit card now have more credit card debt, over $2 ,000 more than younger people. for younger workers, high debt levels make it nearly impossible to create an adequate nest egg and provide for a secure retirement in the future. increasing debt along with rising health costs means future generations have to live on less. right now, average retirees have

enough social security, pensions, and savings to replace 80% of the income earned while they were working, but that figure is headed downward. our data suggests that when today's workers retire, they could end up with just over half, over half, just over half of the preretirement earnings factoring in rising health care costs. speaking of an economist, that's just not enough for most people to maintain a standard of living. the research shows a great many of individuals are already unable to pay for health care including in families with insurance. one in ten americans are in a family that currently has medical bills and can want pay it -- cannot pay it all and struggle to pay the bills and put them on credit cards or spread out payments over time. the burden of health expenses does not vanish once you qualify

for medicare, less generous than most people realize. a recent study estimated that a 65-year-old couple retiring in 2012 and receiving medicare would still need savings of $240,000 just to cover their future health care costs. that includes their premiums, their deductibles, and copayments, but it doesn't include the extremely high cost of lofng term care. yet, according to aarp's public policy institute, half of all middle income families, age 65-74, have less than $53,000 in savings. they are going to need $240,000 just to cover their health care, not pay for going out or buying gifts for their grand kids, and they only have $53,000 on average in savings. that mismatch between savings and costs is a serious problem for families and a serious

challenge for policymakers. barry laid out our policy recommendations to help support the middle class, and i just want to provide a little more detail. high health care costs hurt not only federal budgets, but also the economy by crowding out investment in jobs. containing those costs is essential to protecting middle class workers and retirees. we need to build on and expand the efforts in the affordable care act to squeeze out fees in the health care system. part of the answer is establishing a more competitive, better functioning marketplace for health care. we believe health care providers will respond to financial incentives to contain costs and enhance quality, and we believe that health care consumers will make wiser choices if they have better information about their care. we could lower health care costs tomorrow by making prescription drugs more affordable, both

within medicare and throughout the health care system. this could be accomplished by standard generickers, pathways to market for generic bilomingic drugs, or allowing medicare to negotiate places in part b and d, especially when it is the majority purchaser. importantly, we also need to find ways to increase retirement income. keeping social security financially stable and benefits as adequate, it's critical for maintaining middle class retirement, but people need other resources as well. we have to get more people to save more, and earlier they start, the better. this requires more opportunities for saving in the workplace for nearly one-half of all employees do not have access to retirement accounts from their employers. just offering a retirement plan

is not enough. workplace plans should have helpful teachers such as automatic enrollment to increase participation and automatic ease cay collation to help them face more overtime. we have to increase incenters so that all workers have the benefit of savings in their retirement accounts. one of the key take aways from the research is that a middle class security can disappear in an instant. a costly illness, losing your job, mounting debts, a plunge in home values, all can take a secureerer tiermt -- secure retirement into a struggle. one generation has an impact on entire families, and a threat to one generation can underlie security for all. we know that older americans dream of a better future for our country and their families.

through research, advocacy, and consumer agitation, aarp will do what we can to help make that dream a reality. thank you. [applause] >> thank you, dr. whitman. our final speaker this morning is nancy, aarp's executive vice president for the state and gnarl group. she leads aarp's governor relations, advocacy, outreach activities in health care, national security, and livable communities. >> thank you. [applause] thank you. thank you, jeff. good morning, everyone. it's nice to see you, all. thank you for being here today, and that's true, i'm all that stands between you and the question and answer period. i want to talk for a few minutes today about aarp's advocacy agenda in 2013 and what we're doing to preserve and stengthen

the middle class. given that you heard from both barry and deb about aspects of the federal agenda, by comments focus largely on our state agenda. first, i'd like to reiterate what barry said that we solicit significant amount of input from our members, and all of that informs our work. since march of 2012, we've encaged more than 6.3 million members in a national conversation about medicare and social security. we called it you've earned a say because we believe our members and, indeed, all americans have earned a say about the future of these critical programs. from the beginning, we could see we were tapping into something very special. people of all ages and political persuasions were concerned that there were important conversations happening in washington, and they wanted a chance to voice their opinion.

it was a pretty easy proposition. we heard from folks through questionnaires, town halls, more than 4,000 on the ground events, direct nail, and over the phone, and the response was overwhelming, and i just want to share a few of those findings. first and foremost, across party lines, our members believed that medicare and social security are critical to the health and retirement security of both today's and tomorrow's seniors. they see the importance of these programs to them, but especially to their kids and their grand kids. there is a very powerful sense of legacy. they feel that reasonable adjustments are needed to strengthen the programs and put them on stable ground. they want washington to have an honest and public debate when making decisions about medicare and social security. their view is simple. they should not be made in

changes in the last minute deal. while they believe we must address our very real budget and debt problems, they feel strongly that any debate needs to take into consideration the needs of real people and not just hit a budget number. given the picture paymented by the aarp's reports released today, of a middle class that's stretched and struggling, it shouldn't be a surprise to a -- that we hear constantly about this huge gulf by the washington number's debate and the kitchen table conversations throughout the country. aarp has a long tradition of working to preserve and strernten medicare and social security, and that work will continue in 2013. as debates continue on capitol hill, we'll ensure the voices of our members are heard. while this will obviously be a significant part of our federal

advocacy agenda, our work extends to a number of other issues that are also very important to 50-plus americans. for example, we will also focus on advancing age discrimination legislation, ensuring a permanent, fair payment system for medicare doctors, lovingly called the doc fix by those of us who are insiders, will protect medicare and medicaid, promote improvements in long term care services, and better support for family care givers, maintaining, accessible, affordable telecommunication services for older americans is else on our agenda. now i'd like to shift gears a bit and talk about the other and equally important side of the advocacy agenda. while many of you know aarp as a federal advocacy organization, you may not know that we also advocate in states and communities across the country. in fact, we have offices and

advocates, staff, and volunteers alike in every single state, the district of columbia, puerto rico, and the u.s. virgin islands. we are where our members are. while the spotlight here in washington is on congress and the federal government, much of our work to strengthen the middle class happens in states and communities. ..

will work with state lawmakers to improve their quality, strengthen consumer protections and increase the public accountability of facilities and providers delivering medical care. we will advocate for states to create patient centered medical homes, fight fraud and abuse, improve transitions from the hospital to the home, and protect the privacy and security of electronic health records. we will call on state lawmakers to improve the balance of funding for homeland community-based services. by redirecting sending away from costly institutional care towards support and services in the community. and we will encourage states to broaden hcbs options for home care and personal care services. meanwhile we will promote efforts that give caregiver is a

better understanding of their options. retirement security will advocate for future and current retirees on a number of fronts fighting to protect them from the elimination of promised benefits, preserving access to defined benefit plans where they exist and cost-of-living adjustments and creating new options for retirement savings in the private sector. we will support state laws that strengthen protections against investment fraud, deception and unfair practices such as improving guardianship and p.a. standards and protecting against identity theft, investment fraud and scams that we know are often aimed exclusively at seniors. finally come on home energy we will continue to advocate on this crucial pocketbook issue that affects so many americans. in fact, just this past year we saved consumers $1.8 billion in energy costs through our

advocacy work and state legislatures and wait commissions across the country. we work on these important issues right in front of us we are also keeping our eye on the future. we know one of the most important trends affecting the united states is the aging of our population. everywhere is getting older. states and communities. we can say it this way, there are no benjamin button states, no place is getting any younger. that is why we are working together to bring state and community leaders to develop solutions that address the challenges and opportunities of an aging population to reach solutions that are good for both older and younger americans from housing to transportation to services and support. we've already begun this work

and in our arm of states, iowa, oregon, utah, michigan and pennsylvania, and we will travel to states throughout 2013. we've recently launched a new digital resources, aarp.org/livable so they can access research and examples of what communities are doing to deal with an increasingly older population. in conclusion i just want to say that all those that aarp are looking forward in 2013 to joining forces with many of you with the congress, the white house, governors, state lawmakers, in an ongoing effort to help strengthen the middle class and held americans over the age of 50 live their best lives. thank you very much. [applause] >> thank you, nancy. i would like to ask dr. whitman

and barry rand to join us on stage and i think everyone for your participation so far today. in a few moments i'm going to invite our guests from the media to join us for a brief question and answer session. you will see aarp media relations personnel throughout the room and gathering microphones right now. because of the large number of media professionals present, we would ask that you limit your inquiry to one question at a time so we can accommodate as many of you as possible. if there is additional time remaining after the first round of questions, we will recognize you for follow-up questions as appropriate. the first question is in the corner with arthur deily nei, huffingtonpost.com. >> does aarp etch oppose the change if it comes with protections for the older workers and those that have retired? >> it's very hard to actually litigate around the changed cpi. a lot of the proposals such as

age 80 lose that again by the time they are a hundred benefits have been cut substantially. so, we think that to talk about social security and the changed cpi should be done more comprehensively. but overall, it also has veterans and other people of the programs that use the change cpi the disabled population is a you mitigate it with a population many times to make it allow will and not hurt the most vulnerable dean baker. since i am sitting at the press table should see my blog, meet the press. i'm happy to see the focus on the middle class because i see the obvious issue can't be

separated from middle class issue, wages are falling, there is no way we are going to have a comfortable retirement. we probably need to carry this a step further and ask if there is any chance of challenging the debate and i will be very concrete. it's easy to show i and others most notably paul krugman the reason we have the budget deficit is because the economy collapse and in the classic washington fashion, is the case where the school house is on fire and rather than focusing on putting the fire out, everyone in washington runs out and says you are using too much water. the budget deficit is in the economy right now. that's the truth. we may not like it but that's the truth. it would be great if an organization with strength and integrity would stand up and make the point because we are having an entire budget debate that is promised on things that are not true. >> i agree with you. we do have underlining pieces of our economy that need to get fixed, but massive changes in

spending and regarding a trillion dollars over all in spending would cut medicare as part of the affordable care act. we have to be very careful solving these problems by cutting spending because they can have a slowdown in economic growth. one of the things we are trying to point out with our research today is even with very stable growth rates, the middle class future will not be necessarily as strong as the middle class today particularly if the programs that benefit older people, social security and medicare have gotten away. people are going to rely on those even more. so we need to make sure that while we look at the economy, we do it in a way that supports families as a population that we have. >> i agree with you. unfortunately many people will be on fixed budgets so there is

still a danger of having out of pocket costs went away unless we do something about the cost of health care and the health care system as an example. so we agree they still need to look at making the health care more efficient and we are going to be focusing on that also. >> good morning everyone with the washington post. i was wondering how you see the rest of this playing out in congress because republicans have made very clear that they are done with taxes and ready to start spending the debt limit particularly the entitlement programs that you've just sat here and told us need to be protected. do you think that there should be a successful effort to target these programs in the next couple of months or how you see

the rest of these years playing out politically. >> be asked to have that as a separate debate there's enough consensus from enough people to agree it's not a causal for the deficit issue that we have to make sure there is more time and attention and focus on the issues as we can talk about the impact on people and not just the impact on the budget and especially the deficit portion. >> i guess i would add obviously we don't know what the contours'

of the year will look like. nobody is planning any long vacations on our team. we have learned not to do that. so, we expect i think as you all do that there will be ongoing discussions about these programs that we talked about today. asbury said, our hope is if we are going to have discussions about social security that they can be focused on solvency and adequacy in an environment that is not just focused as it is right now on the changed cpi. but we expect it to be a very challenging year. what we hope is that again, as barry said, we can continue to bring the voices of the member to the debate. we can continue to do what we did and you have learned to say which was talked to our constituency about the options, what they mean to them, in a way that they understand them and that isn't just code.

>> wait for the microphone. >> i am david harrison with ceq. i want to ask a question on social security's solvency. are there any cuts at all to the program would be willing to ascertain or insolvency only comes through higher revenues? >> well, there were savings in the aca $716 billion that happened to be achieved without cutting any benefits. we believe there are other actions that can be taken to for the look at reducing the cost of the program. one of the things we are going to be doing is we have talked a lot about the high cost of the industry and what it means to people's pocketbooks. we've talked about how we can have better care and efficient

care. we are going to be tackling those issues and are controversial will be focused on how we can help reduce the costs spf on social security i think one of the underlining points of the research that we need today is how important those benefits are not just for today's seniors, but going forward. "the washington post" had an article today about how much people are tapping into their 401k savings, and as i mentioned, people's savings aren't to cover their health expenses for medicare. so we think the conversation needs to be brought on entitlement security than just social security and really look at the impact of any change on beneficiaries. another is to make that change out of our own pocket. at this point we don't see saving and the ability to make up for those changes.

>> michelle stein. you said as part of medicare reform you would like to see an emphasis on a proven delivery system and integrated care and i was wondering if you could give a few more specifics as what the delivery system you would be willing to support. >> we think the changes in the affordable care act and demonstrations are moving in the right direction. particularly when we pay more for high-quality care, more for quality than we do for volume. we think providing more help information technology so that we have more information and don't have to duplicate tests is a good direction. we would be providing consumers with more information so they can make wise choices. there is a whole slew of policy actions that most health economists in this town agreed

would help squeeze off their excess funding that we have and we think that is the direction that we should be looking when we reform health care, not the direction of shifting costs or slashing reimbursement rates. >> any further questions? okay. in the corner. >> you talked about a separate track for entitlement reform. with huffingtonpost.com this is my second question, i'm sorry. [laughter] what if they do entitlement reform as part of a deficit reduction package, but they just say that this is a separate thing within the legislation because that is something that you will hear kent conrad and others suggest to respect the congress controls what they want

to do. we like to think that there are areas in which we can influence our experience and analysis that we have. in the end we want them to understand this is more than budgets, this is people come so we will be advocating no matter what form they choose to have a discussion about social security. so we will be there one way or another. we will be working with congress one way or another. they understand the point of view from people that are the recipients of whatever outcomes they are going to have. and so, we will continue to tell our story and we will continue to advocate. >> i would just add it's hard to imagine the deficit you could have a debate about social

security advocacy which we look for as we talk about a separate process would be hard to imagine that one could have that kind of a look at the issue in the context of the kind of discussions we have seen at the last year. >> koschel cheney from politico. you mention you're going to increase lobbying efforts and things like medicare expansion exchanges. i'm wondering if you see eventually every state of lifting the expansion is that the inevitability or do you think some of the state's holding out now could be long-term holdouts? >> it's hard to predict. what we have seen over the last month or so are states the said they were not going to engage in medicaid expansion move in that direction. we work on medicaid in virtually

every state every year and our expectation is 40 to 45 states will be very active debates about medicaid. we are watching it probably as you are from day to day to see how the debate unfolds. >> this will be our last question. >> but it point. you mentioned social security's solvency and adequacy. given that many people haven't heard about social security adequacy it would be nice for you to share with the audience what that looks like and why it's needed in terms of how your research suggested the need for adequacy as well. ischemic many people are shocked at how low social security benefits are. the average benefit is just over 13,000. if you get to the older ages it

is even lower because many of those didn't have the on benefit. so when we talk about the adequacy, we are starting from a pretty low base and a very large share depending on the age group, but that's all they have. they don't have a pension, they have exhausted their savings. they have a small nest egg to pay out-of-pocket medicare expenses so when we talk about adequacy is twofold. one is making sure people realize how low the benefits really are, how important they are in the budget of older persons and then kicking on the debate to say how can we help people save more during their working life so they can add to that as we see the pensions are going away and people are lying on their own savings over time so we have to have a broad base discussion.

further along of times people have to pay the medicare premium base on b and d out of those social security checks plus any co-payments so the amount devotee and of the day to pay for their health and other heating and food is shockingly low from the standpoint of we think of as a middle class security today is one of the reasons we think the cpi is one of the worst ways to address the long-term -- i'm sorry. it's one of the worst ways to do it and the cpi is an experimental measure but the difference between the change cpi is the spending patterns of the workers and the experimental measures that will get the spending patterns of retirees and actually incorporate the health care cost is a much more

accurate way of looking at the patterns, and if we are going to have that what is the proper inflation index debate we should be looking at the right measure of inflation so that is one of the rays that it is in podesta legislation that looks like cpi. >> one of the things that is in my view absent is the awareness about what has happened to the middle class, what is happening to their retirement preparedness and that is one of the reasons we did a study to effect change, one has to understand what is happening, why is it happening, where is it happening. and so i believe that more people that understand the challenge, and we've always talked about we want to save it for the next generation but right now it looks like the next generation is going to have a rough time than the current generation. and so, part of what we are

doing is an awareness to the campaign. part of it is explaining our position and why our position is to protect social security and why adequacy matters so you will continue to see more of that as you move forward. >> thanks to everyone for being here in the question and answer period for the interest and for joining us today. several professionals and other staff in the room for the next half-hour or so so please reach out to them for any additional questions or follow-up. >> thank you. [applause]

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the greatest honor history can bestow is the title of peacemaker. this honor beckons america the chance to help lead the world of last out of the valley of turmoil and on to that high ground of peace since the dawn of civilization. >> the scientific advances and industrial progress available for the improvement of the new developed areas why did you

write a book of your experience? it's important history and i felt the fdic perspective should be brought to bear. there's been some other accounts of the crisis i thought were not completely accurate, especially in terms of what we did and what i did, so i thought it was important for the historical record to present our perspective and also i think currently for people to understand that there were different policy choices come in different policy options. and if we want to prevent another crisis from happening i felt the public itself needed to engage more financial reform to educate themselves for an

elected official. it's hard to make it acceptable and i have policy recommendations at the end of the day that help people. federal reserve bank of dallas president and ceo richard fisher spoke about the need to downsize financial the institutions deemed too big to fail and the importance of reestablishing traditional banking practices. he also said the recently passed dodd-frank financial regulations were too confusing and it should be simplified. mr. fisher spoke for about 50 minutes of the national press club here in washington. [applause]

>> thank you very much. it is also my great pleasure to welcome all of you here today, and on behalf of the gerald r. ford school of public policy, the university of michigan is extremely honored to welcome the honorable ben bernanke, chairman of the board of governors of the federal reserve system. today's conversation is the latest in our series of distinguished lectors, policy talks at the ford school. we are so pleased that white could produce today's events and we are also pleased to have the president mary coleman with us today as well as a emeritus wilson and powers who were already mentioned to you. we also have several of the university's executive officers and dean and i would like to welcome all of them and thank them for joining us today. while it is an honor and a truly personal pleasure for me to

introduce our special guest, as the central bank of the united states, the fed's charges to produce a healthy economy and stable financial system. this is a complex and incredibly important mission and that makes a person one of if not the most important economic policy maker worldwide. chairman ben bernanke was first appointed the federal share in 2006 and he has served in that role during the most challenging period for monetary and financial policy since the great depression. the financial crisis, the great recession, very slow recovery with persistently high unemployment, evolving global challenges and of very contentious situation between congress and the administration which continues to stymie the fiscal policy. chairman bernanke was uniquely prepared for this extremely complicated role as a highly respected economist he taught at harvard, mit and stanford

betroth thee to before joining the faculty and he already served as a fed governor and chaired the council of economic advisers. he's an expert on the role of central banks and he is renowned for his research on policy during the great depression specifically how the fed could have handled things better. in fact in 2000, he wrote a paper entitled the clash course for central bankers which was published in the policy committee has a deep and longstanding commitment as well to education and i know that he recently took time out to a town hall meeting for the k-12 teachers and so i am particularly pleased today that joining us in the audience is an advanced economic class. we are delighted to have you with us. a word about our format. for the first portion of time, dr. bernanke will join me here on the stage in a conversation about a number of economic issues. so the rest of the time he has

agreed to take questions from the audience. they will be coming through the aisle to collect question cards from you. those of you that are watching online or even those of you in the audience are welcome to tweet your questions using as a hash tag bernanke. we will select questions along with two of our graduate students. now it is my great pleasure and honor to welcome to the stage, chairman ben bernanke. [applause] >> suzanne, before we get started by one to take a minute to remember ned who served here

more than 20 years and was one of the first is not the first dean of the policy school here. i knew ned as a member of the board of governors of the federal reserve in washington. he was a terrific colleague and one of the first people to figure out the subprimal issue as you probably know and it was a great loss. i just wanted to say that and say thank you for inviting me here to michigan. >> thank you very much. we are delighted to have that also for your special words about ned who's played such an important role in the development and we are delighted to have you back to the it perhaps a good place to start our conversation is with something that i'm sure many in our audience have been paying close attention to and the recent weeks and that is the fiscal cliff. i can't believe that is the term

that you are credited with popularizing with that uncertainty about fiscal policy is one of the concerns that is slowing economic growth. well a deal was struck recently. what are your views of the outcome? >> when you think about foreign policy there are a lot of issues and the two big issues right now that we need to think about, first as the long run sustainability. as the congressional budget office and a lot of other experts have shown, if there is no change of the next couple of decades, deficits will rise, debt to gdp ratios will rise and our debt will become unsustainable so a very important of objective for the policy is to find a plan to bring the federal budget under control in the next few decades. the second issue which seems contradictory to the first is that we are still in a relatively fragile recovery and

we want to avoid taking fiscal actions that will push the economy back into recession. that is one of the risks that the fiscal cliff posed that if the tax increases and spending cuts of that size were to occur in the short run, the cbo and others estimated that unemployment would rise and we might go back into a recession, so the challenge is to achieve long run sustainability without hampering the recovery, which we have. the deal was struck together with the previous work in 2011 that involves some spending cuts made some progress in these goals on the long run sustainability the next decade or so we have seen some movement towards stability in terms of

the debt to gdp ratio for example. more work to be done for sure over the longer period but some progress, and then on about a short-run, the fiscal cliff deal on new year's eliminated a good bit of the restrictive components of the fiscal policy that would have had such adverse effects. again, not completely but at least a good start so there was a bit of progress on these goals but i should hasten to say we are approaching a number of other critical watershed is coming up. we've got the funding of the government and the so-called sequester that is a set of

automatic spending cuts as the fiscal clever arrangement and we have the infamous debt ceiling which will come into play so we will be seeing a lot of activity the next few months about the appropriate size of the government and about the size of the deficit and a lot of back-and-forth over these issues. without going into all of the different ramifications i want to say a word about the debt ceiling which is not everybody understands what it's about. the debt ceiling which congress has to do periodically as gives the government money to pay its existing bills. it doesn't create new spending so it's like a family trying to improve its credit rating not the most effective way to improve the credit rating and

was the slow solution to the debt ceiling in august of 2011 that of the u.s. downgraded last time brough so it's very important that congress take the necessary action to raise the debt ceiling to avoid a situation where our government doesn't pay its bills. estimate the number of people have expressed concern about how much of the challenges actually were addressed in the deal. as you mentioned is certainly went part way that leaves a number of issues still on the table and additional negotiations are learning to read what you characterize that as a class that is facing us or do you think that it's not as concerning as it was when you raised that term initially? >> as i said the fiscal cliff would have probably created a

recession this year. a good bit of that has been addressed but nevertheless, we still have a fairly restrictive set of fiscal policies now. it's estimated that federal fiscal policy will support from the real gdp growth on the order of one to 1.5% this year, a drag on the economy and at the same time we have quite a bit to do with addressing our long-term sustainable the issues so it's a lot more work to do. let me be clear about that. but it's going to be a long haul. it's not going to happen overnight basically because the government budget represents the values and priorities of the public and the decisions being made about what to spend and what to tax are difficult and contentious decisions double take time to address. >> those issues are not the purview of the set and so why

don't we shift gears and talk more specifically about some of the things the fed is doing and it might do. perhaps a way to introduce this to say that they've been keeping interest rates at close to zero since roughly 2008 and its doug pretty deep in to its arsenal of unconventional policies carried a very massive purchaser launched its third round which is intended to bring long-term interest rates. can you tell us how well that is working clacks >> to go back one step, as you said we brought the short term interest rate down to almost zero and for many years monetary policy just involved moving the short-term overnight interest rate up and down and hoping of the rest of the interest rates would move in sympathy then we

hit a situation in 2008 where we brought the short term rate down about as far as it could go almost entirely to zero so the question is what more could the fed do and there were many people a decade ago there were a lot of articles about how they would be out of ammunition at the top rate down to zero but a lot of work by academics and others, researchers in the central bank's suggested there was more that could be done once you got the rate down to zero. in particular what you could do is try to address the longer-term interest-rate and there are two basic ways to do that. one is to talk, communications, sometimes called open mouth operations the idea if you tell the public you are going to keep their rates low in the long term but will have the effect of pushing down long-term interest rates. we call what large-scale asset

purchases. the idea is by buying large quantities of longer-term treasury securities or mortgage-backed securities we can drive down and in turn affects spending investments in the economy. the latest episode so far we are getting some effects. it's kind of early but overall it's clear through the three iterations you refer to we have succeeded in bringing the longer-term rates down pretty significantly and clear evidence of that would be mortgage rates as you know the us 30 year mortgage rate is something like 3.4% now, an incredibly low and that makes housing affordable and that interest is helping the housing sector recover creating some structure jobs rising house

prices, increasing activity in that sector and real estate activity and so on, so broadly speaking we found this to be an effective tool but we are going to continue to assess how effective because it's possible when as the situation changes and the tools could very but what we have decisively shonas the short-term interest-rate getting down to zero on the call with a zero lower bound problem doesn't mean they are out of ammunition. there are things we can do, things we have done, and by that other central banks around the world have done similar things and have also had success creating more monetary support for the economy. >> see you mentioned there's been evidence of the longer-term interest rates that have come down through the initial round.

the concern is the unemployment rate remains very high to further increase activity to try to bring that down one would hope to see some additional movement from the most recent round. are you suggesting one would need to be patient or you say a little bit more for having the kind of effect that he would expect or anticipate? >> we will be doing that on a regular basis. we will be looking first at the impact on the financial markets and we do see some in a packed their to veto -- in pact. we will see if it is improving. there are some modest improvements when we first began talking about the latest round the unemployed rate was 8.1 now it's about 7.8. there's been some movement what we would like to see a stronger

labor market. the labor market with nearly 8% unemployment with 40% of the unemployed having been out of work for six months or more that's not an acceptable situation that is a situation there are too many people whose skills and talents are being wasted and who are suffering significant hardships, so we are looking to see improvements in the labour market and economy more broadly. i can't give you specific criteria except to say we will be assessing the impact of our actions on financial market conditions and looking to see how those link up to developments in the labor markets and the broader economy. as always you have to make assumptions and ask yourself what would have happened if we hadn't taken these actions. but again, the evidence seems to be and i would cite not only evidence on the u.s. but on the

u.k. and elsewhere these types of policies do have some impact on the economy, and at this point of course having reduced the short term interest rate closer to zero we are looking for the tools that we can get to get better outcomes. >> so certainly hopefully there will be more of an impact going forward to continue to bring the unemployment rate down more quickly. you mentioned that you were looking at the kind of tools that are available. is there more in the tool kit that might have the kind of power to have an additional effect? >> on the pace of improvement that's an interesting question because the pace of growth, economic growth over the last few years since the beginning of the recovery has not been as strong as you normally would think would be needed to get improvements in the labour market. nevertheless, we have seen the

decline in unemployment which is fairly significant, and we hope to see an ongoing improvement so it's a little bit hard to judge how much improvement we will see but we want to see things going in the right direction. in the additional tools we mentioned earlier there is basically two principal approaches either security purchases or communication. there's a few other things that are of similar magnitude like the interest rate if we pay on the reserves for example. but those are the basic approach is the we have to read of course we can continue to try to improve our communication, look for ways to be more effective, but there is no completely new method debt that we haven't

tapped. >> we just had a meeting of the detroit board of the board of directors of the chicago fed as you know, which provide some information about the conditions more explicitly in this region, and certainly the conditions across the country are quite varied and i wonder if you can share how you foster in the difference is when making decisions that are more aggregate. >> first come thank you komen team collins for joining the detroit branch. people probably don't know that you have been studying this, but every federal reserve around the country, the 12th reserve banks and a good number of additional branches each one has a board of directors drawn from the private sector that can be academics come it can be businesspeople, community leaders, non-profit

organizers to get their input and insight. this is a very large and complex economy. there are many different sectors and it's helpful to have people from leaders from different parts of the economy from different parts of the country providing this and put into giving us somebody to bounce ideas off of to help us have better decisions and understand what's going on so that is very useful and i attended part of the meeting this morning of the detroit branch and i heard from a number of people about the auto industry, health care, academics industry, a variety of things so that's very useful. in terms of the local economy,

michigan is still not withstanding and it's become diversified and has a significant reliance on although production. because although sales dropped sharply in the recession, the unemployment rate rose to like 15 percent or something like that compared to a 10% national pete. it's now come back quite a bit as the auto industry has improved so we are seeing some strengthening although conditions are still not where we would like them to be. housing market also i think has come back in michigan but like many other industrial parts of the country like pittsburgh plants and other places michigan has also diversified into bringing in high-tech services, health care, education and so on and places like the university of michigan, ann arbor are a tremendous resource for an entrepreneur is, people trying

to develop new high-tech businesses, so it's a good sign to see that america still has a powerful industrial base but it is diversified into a wide range of new types of industries so it's a large and complex economy. i don't know if you ought to talk about the broader economy or not we can come back to it if you like. we have been seeing some improvement in the labor market is not where we would like to be. growth has been moderate. there are some positive signs to look at, and i think one of the key positives and i already made reference to is housing. as you know, house prices in the u.s. fell about 40% and construction fell extraordinarily over this recession and now for the first time since 2007, 2006 we are

starting to see increases in production that's going to affect also a wealth so that's a positive factor that's going to helpless have a better year in 2013 and 2014. a few other things but positive to point out, one as the state and local governments which have been very contraction very mode because the loss of tax revenue during the recession, laying off people, postponing spending very much better shape now than they were years ago including michigan might think and as a result there are going to be the drug on the economy has to have the last few years. energy is looking much stronger, consumers are more optimistic and publishes the index of consumer sentiment which is one of the best guides to help

consumers are feeling and as long as the fiscal policy think isn't getting too messed up, the consumers seem to be more upbeat. so there are some positives, but i want to be clear we've made some progress that still is quite a way to go before we are where we would be satisfied. >> let me shift gears a little bit. as you know there are some very vocal critics of the policy and i wonder what you might say to those that argue for example the policy that has maintained interest rates at such missile loveless taking some of the pressure of congress to attract these challenges and the massive purchases have created extremely high risk perhaps under appreciated risks for future

inflation >> they are critics on both sides, you know. you should give the other side a chance. >> i will get their leader. [laughter] >> well, let me first say that as we think about the costs and risks of any policy, we should also think about what we are trying to accomplish, and i made reference already, but the federal reserve has a dual mandate from the congress to achieve or at least try to achieve price stability and maximum employment. price stability means lower inflation. we've basically taken that to mean to% inflation. inflation has been very low. it's been below 2% and appears to be on track to stay below 2%. so the record is very good. on an plan that though as we have already discussed is still quite high. it's been coming down but very slowly, and the cost of that is

enormous in terms of lost resources come hard should talents and skills being wasted so our efforts to try to create more strengthen the economy to try to put more people back to work is an extraordinarily important thing for us to be doing and i think it motivates and justifies what has been i agree an aggressive monetary policy. so that's what we are doing and why we are doing it. are there other down sides of the potential cost and risk? there are some triet you mentioned inflation. we have used it expansion area monetary policy and increased the monetary base which is the amount of reserves banks hold with the fed. there are some people who think that is going to be inflationary. personally, i don't see much evidence of that.

it's quite low. inflation expectations are quite well anchored and forecasters do not see any inflation coming up and in particular, we have all i believe all the tools we need to undo our monetary policy stimulus to take that away before inflation becomes a problem. so i don't believe that significant inflation is going to be the result of any of this. that being said, price stability is one part of our goal mandate and we will be paying close attention to make sure that inflation stays well contained as it is today. the second issue worth mentioning is the financial stability this is a very difficult issue. the concern has been raised that

by keeping interest rates very low that we induce the federal reserve as people to take greater risks in their financial the investments and that in turn could lead to instability later on. again a difficult question. i probably could take the rest of the hour talking about it so i don't think i will do that. what i will say is we are first of all very engaged in a monitoring the economy and the financial system. the fed has increased enormously the amount of resources we put into monitoring financial conditions and trying to understand what's happening in different sectors of the financial markets. we have also of course been a part of the expanded effort to try to exchange our capital banks, by making derivative transactions more transparent by toughening up the supervision and so on.

so we are taking measures to try both to prevent financial stability and to identify potential risks that we but then address to the regulatory supervisory methods that we are very much attuned to these issues, but once again i think that this is something that we need to pay careful attention to as we discussed in the statement and have for a while, as we evaluate the policies we are going to be looking at the benefits, which i believe involves some help to economic growth to the reduction of unemployment but looking at cost and risk we have a benefit approach we want to make sure the actions we are taking are fully justified in the cross benefit type of framework. i didn't talk about the congressional issue. you know, it's not really up to

the fed to try to play games to try to reduce the congress to do with this supposed to be doing even if congress needs to be addressing these fiscal issues, and interest rates will eventually rise because that means the economy will be strengthening. we are not to be playing games with that. we are going to follow the mandate which means do what is necessary to help the economy be strong. congress should take care of their job which is to address the fiscal issues which i talked about earlier. i don't think that small changes in interest rates are going to make that much difference. indeed i think the worst thing that we could do is if we raise interest rates prematurely and cause the recession would greatly increase budget deficits and what makes a solution to the problem of what more difficult. so, i don't see that forcing congress to take action on the

fiscal policy is a very sensible way to go. >> as i mentioned in my introduction, you came to your position with a real expertise as one of the experts on the great depression and how the policy makers should react in the midst of a crisis. now that you have actually lived through a major global crisis i wondered if you could tell us what surprised you the most? >> the crisis. [laughter] i was very engaged, very interested in the financial crisis as an academic and worked on the depression. i did theoretical work on the financial crisis in the macroeconomy and i was interested when i came into the fed in addressing issues related to the potential crisis this was

a large and complex crisis and that was more severe than i anticipated certainly and it's fair to say than most people anticipated but we did learn things from history, and there's a lot of value to studying history particularly from our perspective of economic history because it helps you to see what your predecessors did wrong and did right. two things we learned in the great depression, one was not to let monetary policy get right to read in the 30's the federal reserve did not actively try to expand monetary policy accommodation and as a result there was a deflationary about 10% a year deflationary and falling prices very damaging. the fed also didn't do much in the 30's to try to stabilize the banking system by about a third of all the banks in the country

failed so those are two lessons we tried to learn from and we had been discussing very aggressive on the monetary policy side and we took strong actions to try to stabilize the financial system because we understood that the financial system collapses and the economy is likely to collapse as well. as we took those actions learning from what had happened in the 30's and a couple of other things i think that were useful during the 30 is in part because obviously the world was still recovering from world war i, there was a lot of international emnity. ..

z >> we worked to ensure they have enough dollars to lend for banks that need to use dollars in the transactions, and so cooperation has been very helpful in the latest episode, and that was another thing that we learned from the 30s. one last thing that occurred to me, one reason that the fed and other policymakers didn't take more aggressive action to try to

end the great depression was they were afraid to do anything that was up orthodox. there was the gold standard. there was a whole variety of standard practices, and given great uncertainties they faced, and i'm not being critical because it was an incredibly difficult period, they often maintained a very orthodox approach. first to change that in the united states was president roosevelt who did a lot of different things, many of which some did not work and others that did work, but sometimes in a severe situation, you need to consider unorthodox approaches, and the fed and other central banks did undertake some policies, which not all worked, but a lot of them did, and we helped to stabilize the global

financial system and begin a process, still underway of bringing the economy back to where we'd like to see it. >> well, you raised the issue of what's going on globally, and cooperation that emerged is a very positive thing, but, of course, the global linkages is very important in terms of prospects for u.s. growth. you look over the medium term, where would you see a kind of plausible scenario to generate demand for the growth that we hope the u.s. is able to achieve? the -- i think, you agree, to go back to the very high household consumption levels, arguably unsustainable, given challenges in europe, and slowing growth in china, not so clear where that growth might come from, and i wonder what your thoughts are about that, that are of concern?

>> well, it's true that global growth has been somewhat slower, for a variety of reasons, different reasons. one is the european situation, which you eluded to. europe, much of europe is in recession this point following the difficult financial problems that they had, and some emerging market economies slowed, again, for a variety of reasons. the slow down in china was at least partly a policy goal to try to create a more sustainable and stable growth path and to try to shift the sources of demand to china from foreign buyers, exports, to domestic demand so a variety of things have happened, slow overall growth, and we saw in the u.s. just the last reading, low

export numbers, and for us, that's a loss of, again, potential growth from our perspective. there are a couple of challenges. one globally, the different parts of the world that are facing slow downs, each has to address its own set of issues. in europe, there's some progress made in addressing their sovereign debt in banking issues that they have. you know, the european central bank has taken important steps to try to stabilize the financial markets there, have been helpful. they are working on improving their fiscal arrangements, both to create longer term steanability and individual countries, but also to put up a set of agreements under which countries they are willing to work with each other on fiscal matters. they are working to develop a banking union where bank regulation would take -- be done throughout the eurozone by the

ecb or some other agency, and that would strengthen european banking system making it less dependent on individual countries, and so steps are being taken in europe which i hope will stabilize that situation over time. in the emerging markets, again, there's a variety of different stories, but i think the fundmentals there are pretty good, as you know, and have if there's a moderation of growth in some countries, we are seeing overall a remarkable transformation of china and india, the biggest antipoverty program in history. the growth in the country lifted many millions of people out of poverty so i think the growth will proceed in those areas as well. with each country, each region, latin america, asia, dealing

with different sets of issues. >> well, i know the audience has many questions to pose to you. perhaps, one final one before i turn over to our students to hear questions from the audience, and that is given all the range of thanks that we have already discussed, is there -- are there one or two particular things that keep you up at night? [laughter] >> realm, we have a dog that sleeps with us. [laughter] i try to get as much sleep as possible. i think that's probably good. it didn't work out today because the airline canceled and long story, but -- [laughter] no, i i want to see our economy recover. i'd like to see this -- i'd like

to see stronger labor market, fiscal policy addressed the issues i mentioned, and there's a lot of difficult issues out there, but i do think things are moving, you know, not as fast as we'd like, but in the right direction, and i'm cautiously optimistic about the next couple of years. >> thank you. let me -- [applause] well, as i mentioned, i'm sure there's a great many questions that have already been sharedded with our presenter. let me turn the floor to them. >> thank you very much. i'm a master student as the school of public policy and school of business. the first question is that if treasury had prevented a trillion dollar platinum coin,

would the fed had acceptedded it and credited the accounts? if not, why not, and what's that mean for the independence of the fed moving forward? >> well, as you -- [laughter] i'm not going to give that any oxygen. [laughter] as you probably know, the treasury and the federal reserve over the weekend -- the treasury issued a statement which the federal rereceiver approved stating that we didn't think that was the right way to deal with this problem. i mean, there are -- there are legal issues, policy issues. i think the right way to deal with this problem, as i said earlier, is for congress to do what it's supposed to do and needs to do and authorize an increase in the debt ceiling to pay our debts, pay our bills and that's the right way to do it, and, you know, i think that's what will eventually happen, but i don't think that going off in the other direction would be all that helpful.

>> hello, chairman, i'm a second year -- [inaudible] >> second question, does the debt ceiling have a practical purpose and could it be eliminated without much consequence. >> does what have? >> the debt ceiling. >> oh, no, it doesn't really have -- symbolic value, i guess, but what -- no other country, i believe, maybe one or two other countries, but i think essentially no other countries in the world have this particular institution, just so everybody understands what it is. the congress appropriates a hundred dollars, tells the government to spend a hundred dollars on whatever, and then it raises $80 in revenue through its tax code. now the math here says, you know, go to the go borrow $20;

right? no, congress has a third rule saying 100 minus 80 equals 20. if the congress is approving spending and approving taxing, and those two things are not equal, then it's logically that there's got to be something to make up the difference, and that difference is borrowing. now, i'm not saying the deficit and debts are good thing. i'm not saying that at all, but the way to address it is by having a sensible plan for spending and a sensible plan for revenue. make decisions about how big government should be or how small it should be. again, as i said before, this is sort of like a family saying, well, we're spending too much, stop paying the credit card bill. that is not the way to get yourself into good financial condition, so, yes, i think it would be a good thing if we didn't have it. i don't think that's going to happen, and i think it's going to be around, but i do hope that

congress will allow the government to pay its bills, not raise the possibility of default, which would be very, very costly to the economy, and then address very seriously these fiscal issues. i'm not saying we shouldn't do that, absolutely. there are important issues, fundamental values involved so let's do that, but we don't need to do it in the context of the debt ceiling. >> do you believe the fed should actively prevent future asset bubs, and if so, what tools do you have to do that? >> when i say "bubbles," it's very, very difficult to anticipate, obviously, but we can do some things. first of all, we can try to strengthen our financial system, say by increasing capital

liquidity that banks hold, improving supervision of those banks, by making sure that every important financial institution is supervised by somebody. there were very important ones in the crisis that essentially had no effective supervision. if you make the system stronger, than if a bubble or some other financial problem emerges, the system will be better able to be more resilient, better able to survive the problem. now, you can try to identify bubbles, and i think there's been a lot of research on that, a lot of thinking about that. we have created a council called the financial stability oversight council, the fsoc, made up of ten regulators and chaired by the secretary of the treasury, one of whose speedometers is -- responsibilities is to monitor

the financial system as the fed also does, and try to identify problems that emerge. you're not going to identify every possible problem for sure, but you can do your best, and you can try to ensure it's strong, and when you identify problems, you can use, i think, the first line of defense needs to be regulatory and supervisory authorities that not only the fed, but other organizations like the occ and fdic and others have as well. you can address these problems using regulatory and supervisory authorities. now, having said all of that, as i was saying earlier, there's a lot of disagreement about what role monetary policy plays. it is not a settled issue. there are people who think it's an important source, others think it's not. we have to be open minded about

it and pay attention to what's happening, and to the extent we can identify problems, you know, we need to address that. the federal reserve was created in -- about a hundred years ago now, 1913 was the law, not to do monetary policy, but rather to address financial panics, and that's what we did in 2008 and 2009, and it's a difficult task, but going forward, the fed has to think about financial stability and economic stability as being in a sense the two key pillars of what the central bank tries to do. we will, obviously, be working very hard on financial stability, using regulatory supervisory powers, trying to strengthen the financial system, and, if necessary, we'll adjust monetary policy as well, but i don't think that's the first

line of defense. >> okay. this question is from twitter. since the fed declared it was tacting a 2% inflation rate, the fomc released its projections five times. each one of these projecs, the inflation rate came in below this target. why then has the policy been set for consistently under the target. >> was that 140 characters? [laughter] [applause] >> i suspect many in our audience had related questions. >> very good question, and when we've tried to address. as i said, earlier, deen collins asked me about the risks of some of our policies, i was pointing out that inflation is low, and,

indeed, it's below the 2% target, and unemployment is above where it should be, and therefore, there's a strong presumption that we should be aggressive in monetary policy so, you know, i think that that does make the case for being aggressive, which rewith trying to do. now, the additional point that i made though was that, you know, the short term interest rate is close to zero, and therefore we're in the world of nonstandard monetary policies, asset purchases, communications, and so on, and as we were discussing earlier, we have to pay very close attention to the cost and the risks and the et cay sigh of these nonstandard policies as well as the potential economic benefits. to the extent that there are costs or risks associated with nonstandard policies, which do not appear or at least not to the same degree for standard policies, then, you know,

economics tell you when it's costly, and you do a little less of it. we are being accommodative, working hard to try to strengthen the economy. inflation is close to the target. it's not radically far from the target, but in trying to think of the right policy, we have to think not just about macroeconomic outlook, critical, and also the costs and risks associated with the individual policies that we might apply. >> i'd like to follow-up on that question a little bit. one of the things you mentioned earlier, in the tool kit, in which you have been trying to use in a variety of ways is the way that the fed explains a policy to the public. first, there was a number of announcements that dates for how long interest rates remain low, and more recently, the move to making it conditional on

performance, and a variety of changes such as more information in the minutes about the kind of information or the kind of discussion that has happened at the fed, and i wonder whether that increased information about what the fed's thinking is helping to be more effective or, perhaps, being complicated enough to some degree? >> well, of course, that's up to some extent up to the auditors, the beholders to determine whether they think it's helpful or not, but i think that to address your specific point that switching from the date, you know, when we started out by trying to get conveyed to the markets when we thought, you know, a short term interest rates might start to rise, initially, we gave a date which was just the best guess. as conditions changed, we

changed that debt a couple of times. a better way to do it, in my view, is rather than talking about a date, very nontransparent way to explain what you're doing, people say, well, how did they get the date? what we did in a more recent evolution is to try to explain will be looking for in terms of unemployment and inflation are two main mandated objectives before we process interest rates. it's transparent, what we are looking at, and also, if the outlook changes, suppose, for example, that really good news comes in, i hope it does, good news comes in about unemployment, if we were using the date, people wouldn't know how to adjust that. i mean, how do we change that?

is the date valid or not? if we're using these guide posts in terms of inflation and unemployment, then the investors in the market can say, well, the date where we get to 6.5% unemployment seems to be closer now than we thought, and that allows us to change the estimate when the fed is going to respond, and so that should allow a greater clarity about how policy will evolve over time, and that's the goal. i mean, we have worked as a committee. we have -- it's not easy to work with 19 people, all who have very strong opinions, but over time, we tried to increase our clarity and tried to communicate more clearly, and each individual change can be debated, but i think if you look at the broad sweep of what we've accomplished in the last 15

years or so at the federal reserve in terms of communication, there's just an enormous change, and we are just much, much more transparent and easy to understand, i think, than would have been the case 15-20 years ago. >> so the shift from fed speak to talking about fiscal cliffs is really quite striking. >> what's one aspect that's not currently discussed in the media that requires reform? >> well, i think the main area that has been put aside for the time being is the government sponsored enterprises, fannie mae and freddie mack, taken into receivership at the beginning of the crisis because of the losses they suffered on mortgages and because of their low levels of

capital. i think there's a pretty wide spread agreement in washington that reform is needed for those institutions, and the treasury put out some alternative suggestions, other suggestions made by members of congress, but so far not too much progress made in that area, and i think that's one pretty obvious area to be addressed, but i would say that, you know, the bill does, of course, very broad in the coverage, a lot of the major parts of the financial system. >> this question comes from an audience member. how do you respond to the people who question the constitutionality of the federal reserve and would like to severely weaken it, and further more, how do you respond to ebbs of -- members of congress who wish to audit the fed? >> well, i'm not a lawyer so i do know article -- never mind --

[laughter] i'm not a lawyer, but the fed has been around now for a century, and nobody so far has had a supreme court case. i'm not going to get into that issue. i think the fed performs the critical role of managing the monetary system which is, of course, a power that congress has to delegate, which its done. let me talk to the other issue which i think is more substantive. as you know, there are bills in congress that would, quote, audit the fed, and it sounds like something how could anybody object to auditing the fed? don't you have to look at people's books? the trouble with auditing the fed is that's not what it's about. it's a misnomer. the feds' books are thoroughly and completely audited. we are audited first by an

outside private sector accounting firm giving us a clean bill of house. all the backs, all the financials are open to the gao, the government accountability office, which is working for congress, the governments, and can look at anything they want to look at, and, third, there's an independent inspector general that is able to, you know, evaluate any aspect of the feds financials for activity that it would like. if you like to see more about this, the fed's website, federalreserve.gov, where we all go to. all the financials, all our activities are thoroughly awe -- audited with one exception. that exception is that in the law which created the government accountability office, the gao,

there's an exception made for monetary policy. in other words, gao can do anything it wants at the federal reserve, but what it can't do is do in and awe did a monetary policy decision. now, what the audit the fed would do is simple. it would strike that clause. if the awe -- audit the fed bill passed, then a congressman who didn't like the fed's latest interest rate move could say gao, audit that, and that means the government accountability office sends its staff into the federal reserve to look and see why did you raise interest rates and begin to investigate that decision. it seems to me that's the first step towards basically the federal rereceiver no -- redeserve no longer being an independent central bank. there's an agreement that if you want monetary policy made based on long term considerations and not based on short term political considerations, then the central bank used to have

independence in making monetary policy. what this bill would do is strike the very heart of that independence. so it's my opinion people who support the bill think it means what it sounds like which is something about the financials, nothing to do with financials. it has to do with whether or not congress can ask the gao to investigate a decision by the feds that it doesn't like, and, again, i think if you want a healthy economy, you want to have strong and independent central bank, and that's not consistent with that bill. >> this is the last question, and it comes from twitter. there's a vibrant discussion of ma crow economic discussions on social media, do you get information from the discussions, and if so, how? >> well, you know, i read blogs.

i -- 140 characters limits the discussion on the twitter. those, i mean, thing blogs have become a pretty important source of intellectual exchange. the same way -- there was a very important step, dean collins will remember this, used to be that years ago, way long time ago, if you were an academic, and you wrote a paper, then you had to submit it to a journal, took two years, got published, and, you know, it was three years after you wrote the paper before anyone knew what you were working op, and then came the internet and working papers and so on, and pretty soon, you know, papers were available almost immediately for professional evaluation. even that, of course, involved the long delay involved in doing the research and writing the paper and so on.

what if you had a shorter perspective? a shorter idea that you wanted to put out there? well, again, the internet has provided useful ways for people to communicate, to discussion monetary policy, and i follow a lot of baseball blogs myself, actually. [laughter] that's just the next step in creating conversation among people. you know, i think that's been constructive so there are a few federal reserve blogs. the fed has one. the new york fed has one, and we have twitter, we have facebook. really moving along here. >> there you go. [laughter] we are old fashioned, but i think the social media do provide a convenient way to communicate quickly to a group

of people, to exchange ideas, and to keep track of what's going on in a particular area so, you know, i think there's positive developments there. >> perhaps we should encourage you to follow the tigers while you're following -- >> okay. [laughter] >> unfortunately, we are out of time. i'd like to thank our questioners for posing the questions. i want to thank all of you in the room and online for joining us in today's conversation. you can find information on future policy talks at the website and through our twitter site, and i hope you follow us. we will be following the fed. chairman, thank you very much for joining us today. we are -- [applause]

>> the greatest honor history can bestow is the title of peacemaker. this honor now beckens america. the chance to help lead the world at last, out of the valley of turmoil and on to that high ground of peace that man has dreamed of since the dawn of civilization. >> we must embark on a bold new program for marking the benefits of the scientific advances and industrial progress available for the improvement and growth of our underdeveloped areas. >> this weekend on american history tv, public radio's back story with the american history guys, peter, ed, and brian explore the history and traditions of presidential inaugurations, live saturday

morning at 11 eastern, part of tree days of american history tv right through inauguration day on c-span3. >> he had been talking about this dpreem, the american dream, became his dream, and he had been in detroit just a few months before, and he had talked about, you know, i have a dream, and that america will someday realize these praips. s with the declaration of independence. he was just inspired by that moment. >> sunday, on "afterwards," recall the journey as a civil rights activist participating in the march on washington, two prominent history tv torian and editor of martin luther king jr.'s papers, part of booktv this weekend, monday, featuring authors and books on the inauguration, president obama, and martin luther king, jr..

>> why did you write a book about your experience? >> it was an important period of history, of i felt that the fdic's speer techive should be brought to bear. there was other accounts of the crisis that i thought were not completely accurate, especially in terms of what we did and what i did so i thought it was important for the historical record to present our perspective, and, also, i think, currently for people to understand there were different policy options and disagreements and if we want to prevent this crisis from happening, there had to be interests, educate themselves better, make it an issue, and i try hard to make the book accessible and take seriously. >> the former head of the finance cooperate on the government's role in the country's worst financial crisis since the dpreption. her book is "bull by the horns,"

sunday eight -- sunday night at eight on c-span's q&a. >> several corporate executives spoke, and one said the debate over raising the debt ceiling was playing russian roulette with the economy. this is an hour and 20 minutes. [inaudible conversations] >> all right, should we get started again? either i'm losing my vision or the clock is off, but i'll use my watch. if you could come in from coffee to start our second panel, we're delighted to welcome a really terrific set of panelists, luke kaden, mia, one of the most stall worth leaders here in dealing with the debt problems

and now in leading fix the debt campaign. bob mcdonald who is the ceo and president of proctor and gamble, and ralph schlosstein, really, a terrific group. i want to give a little context while everyone's filing into the room. i'm with the economic studies program at brookings. if we cast our minds back to the 1960s, the 1960s, obviously, was a troubled decade politically, but economically was strong, unemployment was low, so, really, almost all of that decade, and then that was followed by -- i don't know if a lost decade, but a much more difficult period economically in the 70s and the early 1980s, and the thing that hung over the economy at that time was inflation. we just couldn't seem to deal

with the inflation problem. we had a rescission in 1981-82 #, a double dip recession, and then finally, paul volker, chairman of the federal reserve and his colleagues decide to whack the economy over the head really hard and take the inflation out of the system and finally, it did, although it took awhile, it was not until the fall in oil prices in 86, but we really got rid of the inflation demon, and i think it in some ways laid the ground work for the period following that in the 1990s when we had strong productivity growth and we had strong markets starting in the 1980s. some of the same reasons, it's a

hard problem to solve, lacks a federal reserve so we don't have the equivalent of an actor like paul who can come in and say, okay, we're going to tackle this program, and this is unpopular, but we're going to do it, but, instead, we have the decision being made by congress and the administration and that two different parties and caught in political cried lock trying to deal with the very difficult problem. you know, even if we had unity of purpose, it still would be a hard problem to solve. we're still in the process of recovering from a really deep recession that was brought about by the financial crisis, still a lot of slack in the economy, and so from, you know, a standard economics, we still want to get more demand, growth in the economy, and so fiscal consolidation is -- goes in the wrong direction, and in terms of getting us back to full pliement, but clearly, it's

necessary over some time because the deaf zit path is not sustainable that we are on. we have to deal with the deficit, but not kill growth. now this panel is part of our grow through innovation that you heard several times, and i want to mention a hopeful note along with the problems that i have just outlined. there are a set of folks, bob, tyler, others who sort of saying we've seen the end of growth. no more innovation or growth. we have to settle down and deal with the fact that we are not going to have anymore growth. i'm doing a little plug here, jew james, a senior fellow, external senior fellow here, and he and i are working on a project with the support of

others, looking at this question and what are some of the game changers, what are the ways in which we can get innovation and actually, as we get out of this mess on the deficit and the recession, really start to get stronger growth in the economy, and the thing that is really needed, the thing that we didn't have in the first, even the first seven years of this century, was sort of innovation driven, output driven growth. we had a lot of restructuring productivity, but we have not had that for some years now, real output drip innovation and growth, and that's part of what we are looking for and part of what the project at brookings and working with the institute is what we're looking for. that's my plug. that's in your -- some beginning of that are in the packs. all right, turns to the panel, and turning to you, lou, first. now, how do the responses to this budget deficit and the

reforms and what's going on, how do they impact the broader economic policy challenges as you see them from your vantage point having sort of ridden the roler coast -- roller coaster of the recession? >> thank you, two points on that. first of all, it's obvious that anyone's who's followed the debates in the last year or so or watched events in europe, that political uncertainty is the enemy of economic growth and investment. we've seen the effects of that on the pace of recovery in the united states, and we've seen it even more in stark belief during the last year in europe. at the same time, dynamic qualities of the u.s. economy also was end trusted with europe and other parts of the world suggest and demonstrate on a regular basis that

notwithstanding the political uncertainty there's a great deal to be optimistic about. there's a good many positives when you look for signs in terms of the prospect of the faster pace of growth and recovery, if only the political uncertainty were changed by progress on fiscal balance, and those signs are more apparent every day. you look at positive changes in different segments of the housing market and housing finance, notwithstanding, remaining challenges, and you look at the pace of recovery and the auto industry, a market with 14.5 million in sales last year, and prospects for more this year notwithstanding the overall economic conditions in the country, still in the slow recovery is very encouraging,

and most important of all, yao see the you see the dynamic quality of the community in this country, contrast that with a lack of any counterpart in europe you see tremendous benefits always a source of the entrepreneurial spirit, a source of strength in the country in comparison to others, and it's in stark relief today as the venture communities spread from its concentration to more and more centers around the country and the strength of the markets at every level of private and public capital raising is very positive. even in the jobs market, which was the most stubborn negative on -- in the picture of the u.s. economy as you saw in the

discussion of the last town hall is a good deal to be more on the mistive about in the revival of manufacturing jobs and increase productivity and the reassuring and the other issues that were discussed. the bottom line is that confidence is everything in patterns of investment, as, indeed, it is, i know, only too well, in financial services, and banking, and at the moment, confidence level remains low, and that's a discouragement to certain kinds of investments. the levels of libledty or investments, standing on the sidelines ready to be put to use are very high across the business community and the financial community and in the u.s. and the spotlight is on

this town and whether our political leaders are capable of resolving this. now, also on the positive side i think while many of us prefer a broader frame work, and there's more discussion about that as it comes from the other panel that's here as well as from me, that the practical reality we know, we can dissect why that was and why they missed an opportunity and why they came down to 24 or 48 hours and were only able to deal with the tax issue, but for the most part, that's history at this point. the fact that they were able to do that is at least a step forward. it added, as you know, from the summary of the state of plays that the president gave yesterday and his press conference, it added 600 million to the billion-four of spending cuts that had previously been

enacted and put into effect in the last two years, and the interest savings on top of that come to a total overall of two and a half trillion over the ten year period that we all have gotten familiar with as the measurement period for deficit reform. two and a half is not all the way to the target of four, that almost every independent group has adopted as a reasonable way to stabilize the debt in relation to the growth and the economy. you can make an argument that a little more or a good deal more would be helpful too, but four trillion over ten years is not a bad target, and two and a half is a fair bit there, and so we move to the next chapter which promises to be messier, uglier,

nastier than the first one, but i think there is on the mitch because as after we saw the first time around, both parties at the leadership level recognized and came to a conclusion that's it's in their interest and political interest longer term to resolve this. it doesn't mean they don't like each other or miewn comate effectively every day or mean that the process is neat and clean, but it's a starting point. if the politics are neutralized short term, which it's very difficult in our government. i think it remains true that the four or five people who count the most have come to conclusion

that's been in all their interest to resolve this. my own view is to be a bit on the optimistic side as we go into the next period. however, to put it in the context of economic policy challenges as martin's question did, i always start with the proposition that necessity does not equal sufficiency. deficit reform is critical at the moment. we all know that. everyone talks about it. the writing about it on a daily basis, but it's not sufficient to meet the economic challenges we have because the fact is we have a fiscal deficit, but many others, some of which were discussed in quite effective fashion in the last panel so i'll just listen for now, and we can go back to them later. we have an education deficit.

we have skill development deficits closely related to education. we have an infrastructure development and repair deficit of e mori nows -- enormously important pace of proportions, and look at other countries from the recession and countries with very different political systems than ours to see the close relationship that infrastructure investment and development have on the likelihood and pace of recovery from a severe, global downturn. we also have, if not a deficit, an important urgent need to address the issue of energy and independence and opportunity that's sitting right in front of us ready to be advanced in the

next year or two, but that requires leadership and initiative in washington and immigration reform, again, the subject that was discussed before. one more word, finally, about the process. for this, i go back to an earlier part of my life as a professor of law and one of the subjects i taught every year was negotiation. negotiation of a variety of contacts from international to commercial and transactional to labor management disputed. i came out of that experience and practical experience as the company before and after, and believed it was a mistake to keep score on a daily basis in

difficult negotiations, especially in the political environment where each participant has multiple constituencies to which they are accountable in some fashion and paying attention to, and so you take the last few days, clearly in a state of play that involved positioning, and we can be critical. it's easy to be critical about why they just have the reaction that everybody has and in a labor dispute, why not just get in the room. they know the range of substantive outcome. it's not a secret. it's not hard to find. why can't they do it this afternoon? similarly, in observing events in the fiscal negotiations, everybody looks at it and says, well, why can't they get four or five people around the table in the roosevelt room this afternoon and resolve it? the substantive outline has always been there. it's been there in every public

and private group, and it's been there in every private conversation with small groups of members of congress from both sides. it's not elusive. the tails can be complicated, especially on issues like health care costs, but the broad outlines of the resolution of these problems are not hard to define, and we know that if we look at the results of the discussions in the summer of 2011, the results of the discussion in december, and it was barely a hundred or 200 billion dollars over a ten year period separating the principles, but they couldn't quite bring it to a conclusion. i think it's preferable to the to score that way or not to look at why they like talking to each other or why not meet more often in the early stages, but rather to see this as a process to

unfold in the next six to eight weeks, and the important thing is whether they get to the finish line this time, not how -- it's unfortunate to go through the process, takes a toll in terms of economic activity, but the price of not reaching agreement is far more significant than that process. i take heart, again, that in every conversation i have with anyone who matters more than most of us do in this process, and they see both political and national interests advantages to their side of their debate, and in reaching a resolution. one has to hope that they do in a timely fashion. one final comment, i think, probably all of us would agree and at some point in the future will get a con sen sees with

this from the political process that the debt ceiling has no rational place, but the fact is playing russian roulette with the u.s. economy and the well being of the population has no place in an honest debate about how much spending should be cut, how much investment should be made to address broader, economic, and social deficits and how to resolve this and get on to other parts of the national agenda. sooner or later, i think the congress and the president will agree. you saw the process of this, and senator mcconnell, and, obviously, the president that the key control is in the

authorization and appropriation process and the ability to pay those bills through either revenue sources or borrowing ought to be attached to the decision to step, not used as a point of leverage and broader and more important negotiations. >> thank you, lew. can i follow-up, and i don't know if this is a little of a tan gent, but i think i just want to ask you because of your position in financial sector, you say that uncertainty is holding back recovery, and i agree with you completely. do you think funding is also, i mean, we know that the missing piece of this recovery is business hiring, business investment. the large business regimely have fairly favorable access to markets, but a lot of small businesses do not. do you think lack of funding, and is this a legacy of the

recession, something that's come out of the financial regulation or is that part of the problem also? >> i tend, unlike some of my competitors, not to put too much weight on the regulatory. all of us have specific issues, definitions that we would have opinions that we voice every day, but the core elements of the core regulatory reform common around the world, i think, were necessary coming out of the experience we had in the reform and should not so long as the playing field is level, u.s. institutions will be strong and capable of responding to them. on the funding issue, it's a question that has more parts to the answer. our capital markets are very strong. those borrowers who have access to them, which to larger enterprises have multiple

options to choose from in funding investments that they choose to make assuming they are credit worthy, and the same is true of bank lending, particularly for larger enterprises. major banks that stood by their large customers, pretty systematically through the prices and certainly in the recovery period. the problem comes in as you go down the chain through medium and smaller enterprises and as you get into households where the -- where the experience of the particularly in housing financing consumer finance we're in a transitional period where we have not yet figured out what takes the place of the consumer

finance industry which has been largely destroyed for -- it's a decent business. you can see examples that have survived. there's basic decisions to be made how much it should be regular lated and how much it should be supplied by a shadow financial services as part of the industry, and in the middle, in smaller businesses, in smaller businesses and small and medium sizedded business enterprises, the financial system is weaker. >> yeah. >> there's less capacity coming out of the crisis. there's a credit deficit in the community and some regional banks that, again, is a serious public policy problem to address in the next couple of years. >> thank you. we want to get your perspective boapt on the short term and long run, but start on the short run because we are right in the

middle of this mess, or at least we've sort of avoided the fiscal cliff, so how do you see things evolving over the next couple of months, and how are these going to play out? >> okay. well, if anyone knew how things would play out, i would be thrilled to know the answer. it's one of the more confusing moments, but i'll start by saying, it's a moment which feels like there's an awful lot of good news and awful lot of bad news. i think the conference today is focusing on the overall economic picture and the pieces that go into really feeling economic growth and innovation. there's so much good news to be had. there's so many ideas that we have here in a think tank where many of them are developed about what can help with growth and the country is in a good position to use those and have a very positive outcome. if one, the whole fiscal issue feels, i'm it's sad to be involvedded in an issue that feels like that, but it's gumming up the wheels of

everything else, and basically there's no oxygen left for any other issues, and as we want to think about immigration, education policy, this one is going to have to get resolved in one way or another before we can go back to the exciting ideas that can lead to the next wave in the economy. the other one is the political environment where we actually -- oh, boy, sorry. >> now, i can't blame the audience. [laughter] >> now, just ignore that. ignore that. that's going to be hard, but we're going to do it. the other piece of it is the political environment where we have the ability to fix the situation. we basically know what the fix is. we know that you need a comprehensive debt deal, that is big enough to stabilize the debt, and i think we all remember the period when you were trying to balance the budget, we're not there. we're not going to be there any time soon, but you want to make sure the debt is not growing faster than the economy, and